Financial Strategies

A look at planning in the post-election period


The election is finally over, and we have a few short weeks to finish any 2020 planning strategies before the New Year. As of this writing, some states are still counting votes, but with the majority in, it appears Joe Biden will be sworn into the office of the presidency in January. Currently it appears the stock market is pricing in a split Congress with a Democratic House and a Republican Senate. The runoff for the last two Senate seats in Georgia will not be known until January.

Historically, the financial markets and economic activity thrive best under a split government due to a set of checks and balances between parties. Nothing too drastic is likely to get passed without plenty of notice as the House and the Senate debate issues.

Based on Biden’s campaign promises, the initial focus will likely be on a COVID-19 stimulus package and health care improvements. This means that infrastructure and jobs growth will be shortly behind and tax reform may be pushed out to 2022, according to Libby Cantrill, CFA with PIMCO.¹

Tax planning is always a good idea, just like investing or planning of any kind. Do what you can today with what you know now, for tomorrow could make today look like a missed opportunity. Regardless of who is in office, with the burgeoning federal deficit and the need for ongoing stimulus, I believe there would need to be tax increases. No one likes to pay more taxes, but the reality is that it appears inevitable in our current economic state. Therefore, I urge folks to consider taking advantage of the last month of the year and utilize this potentially lower tax bracket year to help improve their finances. This could include realizing long-term capital gains or converting IRA accounts to a Roth. Of course, you should still maximize your retirement plan contributions to minimize any increased taxable income.

Investing is also a good idea, regardless of who is in office. Economic uncertainty often increases volatility across the markets. This is a good opportunity to remember that this is a marathon, not a sprint, and you should stick to the long-term plan. It may be difficult to focus on goals when other investors are making short-term, emotional trades.

A potential split Congress under a Biden presidency may still cause some gridlock. Watch for debates around a stimulus plan and other forms of spending bills. The Fed will likely continue to utilize monetary policy and other tools (such as Quantitative Easing) to support financial markets.²

A contentious relationship between the Senate and Biden administration could drive higher rate volatility, but likely favor growth stocks.³ Investor’s Business Daily states “A powerful stock market rally has taken hold, fueled by election results despite surging coronavirus cases”.

The coronavirus pandemic is still likely the most significant factor in the near term. If infection rates and hospitalizations continue to increase, we could see further limits on social and/or economic activity that could depress economic progress. The vaccine is good news but may take years to administer.

Regardless of economic or political shifts, your asset allocation is driven by your goals and risk tolerance and we don’t recommend that it be altered based on short-term volatility. In fact, volatility may present opportunities for long-term investors. Maintaining a well-balanced portfolio can help you to stay focused on the end goal. And, as always, you should consult with your own investment or tax professional for advice specific to your situation.

1. Libby Cantrill, CFA, Head of Public Policy with PIMCO; 2. Sandy Pourcilli, Head of Fixed Income at Mariner Wealth Advisors. 3. Jim Cramer, CNBC

Patricia Kummer has been a Certified Financial Planner™ professional and a fiduciary for over 34 years and is Managing Director for Mariner Wealth Advisors, an SEC Registered Investment Adviser. Please visit for more information or refer to the Investment Adviser Public Disclosure website ( Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th Suite 500, Overland Park, KS 66211. Please note, this reflects our perspectives on the markets and is not a guarantee of future results.

Patricia Kummer


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