Investors Shouldn't Fear the Outcome of Election Night

Investors shouldn't fear the outcome of Election Day

With Election Day coming up next week, many investors are wondering how the results will affect their portfolio.  The big question is which candidate would be best for the American economy, and how either candidate’s policies would be likely to affect the stock market. 

Franck Cushner, certified financial planner and head portfolio manager with Ensemble Finance, says it’s not time to go nuts, since the election of either candidate won’t make a huge immediate difference. “The president by himself isn’t really going to affect the stock market,” Cushner notes. “You need the support of Congress in order to get everything bull-rushed through.”  Cushner points out that financial markets prefer stability: if one party has the White House and the other runs Congress, it makes radical change less likely. 

Suppose Hillary Clinton wins, and the Democrats succeed in taking the Senate.  Cushner observes, “There’s very little chance that the Democrats, if Senator Clinton gets into office, will be able to run the entire Congress, because there’s still a majority Republican House.”  To the extent that she can, Cushner points out, Hillary is likely to seek further regulatory control over pharmaceutical companies; energy, including coal; and the financial services industry, including banking.

Cushner continues, “On the Trump side, his policies are mostly going to be based on cutting costs, on taxes, in that case, letting the smaller businesses have a little more reign, and potentially getting rid of the estate tax, which would be a huge deal.”  Cushner says a repeal of the estate tax is “very unlikely.”  On the other hand, he says, “To unburden these smaller businesses with lower taxes could potentially be a big boon for the states and for the economy.”

However the election turns out, Cushner’s advice is the same: “Make sure you put your money to work” in the stock market. “Give your money a job.”

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