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Vote of Confidence

by Jill Lupine

“Prepare for the unexpected.” While this phrase is often offered as sage advice to cautious investors, it has since become a caveat for observers of U.S. presidential elections.

In the early morning hours of Nov. 9, when Donald J. Trump upgraded his title from Republic presidential candidate to President-elect, most people considered the event an upset, a surprise, even a stunner. Likewise, the vagueness of his policy plans has left most Americans in suspense, wondering how his presidency will affect them—and their bank accounts—when he becomes Leader of the Free World on Jan. 20.

If many of President-elect Trump’s campaign promises ring true, investors could benefit from significant upticks in various sectors of the economy, from defense and health care to infrastructure and energy, as well as any changes resulting from anticipated tax reform. Regardless of which way the pendulum swings, however, locally based professionals echo a familiar refrain when it comes to investors’ financial plans: Stay the course.

“Even though we’re still in the discovery phase and we still don’t know what a President Trump would put into place, investors shouldn’t assume the results will happen overnight,” says Richard J. Massaux, managing director of investments for Philadelphia-based Parker Massaux Investment Group of Wells Fargo Advisors. “I don’t expect the President-elect’s policies to dramatically change the trajectory of the economy in the short term.”

In other words, investors should continue to focus on making sure their financial plans still hold water for the longer term.

Financial markets plunged in the immediate aftermath of Trump’s win but have since rebounded strongly. In fact, U.S. equities climbed to historic highs during the week of Thanksgiving; the Dow Jones Industrial Average rose approximately 70 points, closing above 19,000 for the first time ever, while the S&P 500 closed above 2,200 for the first time. Expectations for coming deregulation—energy, banking, health care, etc.—seem to have stoked optimism in the U.S. stock market, though some suggest the recent surge was due largely to “the fundamentals we already have in place.”

Looking ahead, adjustments to international trade policy could shake up global financial markets, as Trump campaigned on promises of getting tougher on trade pacts with key overseas trading partners, particularly China. Although some investors remain anxious over Trump’s trademark unpredictability, Massaux insists the country’s collective stress level has eased since Election Day.

“During the election, I could name five or 10 clients that wanted to do some drastic selling and rebalancing if they saw the election go a certain way,” he recalls. “It was an ugly election, with a lot of emotion. A lot of it was the anxiousness of getting past [Election Day]. In the two weeks leading up to it, you saw the markets dip, maybe because of the possibility of Trump winning. But by the Monday and Tuesday of the week of the election, you saw things rally back up.

“At the end of the day,” he continues, “people might not have been expecting this result, but it seems they are excited and eager to see how everything plays out.”

On Solid Ground
A good financial plan is designed to withstand changes, whether those changes come from shifts in U.S. policy or upheaval in one’s personal life. When Joslyn G. Ewart founded Entrust Financial LLC in Wayne, she wanted to help clients prepare for life’s many question marks so they can have the confidence to know that everything will be all right when the unexpected does happen. She especially wanted to help women, a segment of the population she considered underserved, “find their financial voice.”

“Women control more than half the wealth in this country, and they typically live longer than men, but fewer than 20 percent of women have a sense of financial confidence,” she says. “I want to help women move past the paradigm of ‘Just sign here, honey’ so they can feel empowered. A lot of couples just don’t know how to talk to each other about things like this; for a lot of couples, money is a big hot-button issue, even more than sex.”

Ewart sees the issue as having critical importance, considering the nation’s high divorce rate. When a marriage dissolves, having a firm understanding of the financial situation can help the individuals involved—man and woman alike—find firmer footing once the proverbial dust clears, she suggests.

“It’s really important for virtually everyone out there to work with a competent financial professional,” she says, suggesting investors consider turning to those advisors who have made the effort to earn the professional designation of Certified Financial Planner, or CFP, as she has. “An investor should take a holistic approach to their financial resources, with a team of advisors that goes beyond a financial advisor—your attorney, your CPA—so they’re focusing on more than just their investment needs.

“People should be confident as they head into retirement,” she continues, “and I encourage them to put as much time into their financial well-being as they do into planning their next vacation. Retirement is the biggest bill of our lives, and each of us needs to pay for it ourselves.”

Put another way, investors should look to the future guided by a sense of cautious optimism, not fear of the unknown.

“We do expect equity-market volatility to continue to rise, but that doesn’t mean you need to react,” Massaux says. “As an investor, make sure you take a hard look at your risk tolerance and long-term goals and make sure your strategies are aligned with those long-term goals. … It’s important to constantly revisit your long-term plans and investment objectives, no matter what the latest evolving news story is.”

Published (and copyrighted) in Suburban Life Magazine, January, 2017.
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