The 2024 Election Edition

Happy Monday!

I hope you enjoy this edition of The Change-up, my weekly newsletter sharing the latest market news and personal finance tips. If you're interested in learning more about working with me, click my calendar link at the bottom.

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Quote of the Week

"The right to vote is the crown jewel of American liberties, and we will not see its luster diminished" - Ronald Reagan

Song of the Week

The Story

Q3 earnings dominated the market news last week, with big tech leading the way. Meta & Microsoft both beat expectations, but forecasted slower growth in the coming months. The Nasdaq hit an all-time high before pulling back to end the week. I'd expect a little volatility this week with an election race coming to an end. 

My View

An 18-month marathon graciously ends tomorrow when we (hopefully) find out who our President will be. Perhaps more importantly, we'll know how the majority in Congress stands.  

In this edition, I wanted to focus on politics' historical importance (or lack thereof) on your investments. And next week, I'll break down the results and what it could mean for your money in the future.

Before I get rolling, I think it's important to state my role in talking about politics. I don't know anything more than you when it comes to predicting how the next administration could impact immigration or student loan forgiveness. I analyze politics to help my clients make more informed decisions with their money. And that's the lens I'll use for this newsletter section.

I've said it before, but markets have historically cared less about who the president is. Democratic and Republican presidents have almost identical market returns over the years (Dems have a slightly better record). The market exists because companies make money for their shareholders. That will continue regardless of our Commander in Chief.

With that said, markets do like gridlock in Washington. As long as one party does not control the White House, Senate, and House, it's going to be tough for radical legislation to be passed. Markets like that because it reduces uncertainty. 

And many actions are highly likely to happen regardless of the outcome of the election. RJ Washington DC analyst Ed Mills notes more than 75% of Biden's funding for infrastructure, semiconductor production, and energy transition remains unspent. There is bipartisan support for energy permitting reform. There will be less regulation due to the Supreme Court's latest decisions. Restrictions on tech will continue. And geopolitical risks will remain, causing defense spending to increase.

And Americans are upbeat on the economy. According to Bloomberg, consumer confidence is at its highest level since 2021. Inflation is statistically coming down. The Nasdaq hit an all-time high this week. 

The largest risks to my clients come in the form of tax changes. Paying Uncle Sam is unavoidable, but we can plan accordingly if we understand the rules. The current estate tax exemption for a couple who is married filing jointly sits just under $30 million. In 2026, that number is set to pull back to around $12 million. This election will help to decide the result, but It's hard to believe anything extreme will be passed due to moderate party members. 

The other item to keep an eye on is the national debt. America is almost $36 Trillion in debt and currently running a $2 trillion deficit in the 2024 budget. The total debt is equal to over $100k per citizen! Eight years ago, the debt was just over $21 Trillion with a $750,000 deficit.

Bill Clinton was the last President to balance the budget. And while the deficit is too large for either candidate to do what Clinton did, The winner will certainly play a role in what the next four years look like. 

Regardless of what happens tomorrow, I'd encourage you to maintain a broad perspective and control what you can control.

Get out and vote!

Reach out to me if the election worries you when it comes to your money.

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