Now that the election results are clear, this is what we expect to happen.
Until President-Elect Trump begins to reveal who he will select as Cabinet members and close advisors, the market may react negatively. This is because the market typically does not like uncertainty. This uncertainty extends from domestic policy to global trade and how other world leaders will respond to our election results.
Of course, no one knows how long this may last.
Hopefully, like the response to the unexpected Brexit vote, this, too, will be short-lived.
What we have done in anticipation of this:
For those of you who take cash distributions for living expenses, we already have between 6 and 12 months of your cash need escrowed. Therefore, we will not be selling positions to raise cash in the near term.
Our investment philosophy is that we stay invested for the long term; we do not try to time the market based on daily events.
With that said, please remember that we have diversified your portfolio and that no Resonate client is 100% invested in the U.S. stock market at this time. Most Resonate clients are closer to a 60-70% equity position. While we expect to see a drop in share price, there is no indication that any large U.S. companies will stop paying dividends due to election results.
Some of you will see this as an opportunity to buy quality companies “on sale”.
Also remember that many of you own annuities with guaranteed protected values which convert into guaranteed lifetime income.
In the near term, expect volatility; if you find it agitating, listen to as little of the news as possible.
As always, reach out to us if you want to talk.
Until next time, live your purpose!
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®