So the election is over, with President-elect Donald Trump the victor and both houses of Congress controlled by the Republican party. While stock futures were rocked overnight, the broad American indices closed in positive territory the next day.
First, stay calm. Whatever your politics, it's important to recognize that half of American voters are elated right now, and the other half are anxious. Fear has driven a lot of the news in this election cycle, and until there's more policy certainty and a degree of predictability, we'll likely see a continuation of volatility going forward.
That being said, generally speaking, it's better not to make too much out of post-election day jitters. Market moves after a national election aren't predictive of the state of the market going forward—in fact, they're no better than a coin toss.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But volatility also drives opportunity. I think we'll see some strength coming back into the markets and, in my prediction, we'll even go to new highs.
What can you do now?
The appropriate course of action for you depends on your personal financial situation, your risk profile and your time horizon. You might be better-served by staying the course in a diversified strategy or by strategically deploying cash.
Just keep in mind that no matter who you voted for, the American economy is resilient, diversified and strong. That makes for good long-term prospects, in my view. I always urge my clients not to ride the highs too high or the lows too low. Instead, it's important to step back from your emotions and have a plan.
I don't have a crystal ball, but in my 24 years as a wealth adviser, I've seen plenty of uncertainty and volatility before, and we'll see it again. The market climbs a wall of worry, which makes prudent planning all the more important.
Bradford Pine is a wealth adviser and president of the Garden City, NY-based Bradford Pine Wealth Group. He assists individuals to create wealth, simplify their lives and plan for retirement.
-
What to Do as Soon as Your Divorce Is FinalDon't delay — getting these tasks accomplished as soon as possible can help you avoid costly consequences.
-
Many Older Adults Lack Financial Security: What Can We Do?Poor financial literacy and a lack of foresight have led to this troubling reality. It's going to take tax policy changes, education and more to address it.
-
Winning Investment Strategy: Be the Tortoise AND the HareConsider treating investing like it's both a marathon and a sprint by taking advantage of the powers of time (the tortoise) and compounding (the hare).
-
How to Fight Inflation's Hidden Threat to Your SavingsIf higher prices are putting your savings goals on hold, you're in danger of financial erosion. Fortunately, several strategies can help stop the spread.
-
10 Inefficiencies I Look for on Rich Retirees' Tax ReturnsYour tax return could hold clues to several missed opportunities and important gaps in your retirement planning.
-
Estate Planning: How Does the Basis Step-Up Rule Work?The step-up in basis, one of the most powerful tools in estate and tax planning, can make a huge difference in capital gains taxes owed.
-
Will You Pay Taxes on Your Social Security Benefits?You might, depending on your income, but smart financial planning now can help lower or even eliminate your taxes in the future.
-
A Simple Trick for Better Investing: Stop Timing the MarketInvestors who stay the course are rewarded for their patience and discipline, enjoying the benefits of compounding returns over time.
