ROCKFORD, Ill. (WTVO) — Between COVID-19 concerns, political division, and a new administration expected to move into the White House, some Americans are worried about what the changes mean for their savings.
We spoke with a financial advisor who says the passing of the baton isn’t a reason for knee-jerk reactions.
“We go through this almost every four years, all the hand-wringing,” explained Jon Aldrich, the owner of Focus Financial Advisors.
With upcoming turnover at the White House, many Americans are wondering how a Joe Biden presidency will impact their tax bill and retirement savings.
“For most people making under $400,000, you’re not going to see really any changes to your tax bill and actually you might see some improvements,” Aldrich added.
Should Biden take over the Oval Office, corporations and high earning citizens can expect higher taxes. But, financial advisors say many changes rely on the senate.
“If it does flip to democratic control, we could see a lot more in the way of higher taxes and things like that that could be a jolt to the stock market,” Aldrich explained. “But then on the flip side, with more Democratic control, are they going to pass a bigger stimulus bill? And if they get a bigger stimulus bill, the stock market is really going to like that too.”
Aldrich discourages clients from making drastic portfolio changes anytime soon. He says it’s best to ride it out and plan for the future.
“The better way to go about it, is to have a long-term asset allocation that you’re comfortable with, that fits into your long-term plans, and stick with it and keep adding money to it on a year by year basis,” he added.
Looking at the stock market, Aldrich says new leadership could fuel the solar, travel, and marijuana industries.
“Things that might not do as well down the road would be things like Zoom or tech stocks. They’ve don’t great as we’ve been cooped up, but now today that we’re getting closer to a vaccine, you’re seeing a lot of those stocks sell off.” Aldrich concluded.