Dear P&A Cashologists,
The presidential election of 2016 is now in the rearview mirror. As I write this, it’s 11am the day after and the calls I’ve received are 50/50, much like the election results. Half of the callers sensed a buying opportunity and the other half wanted a more conservative asset allocation. The Dow futures dove 800 points overnight, opened flat, and are now 155 points higher. As an office, we spent little time discussing the election and instead tackled the issues we can affect. Just this morning, I sat with a client pondering the sale of his business, fielded a call from an attorney settling an estate, and we discussed donor-advised funds with two clients. We also re-arranged a couple meetings and tried to complete some research.
We research the stocks, bonds, and funds we use on a regular basis and don’t invest in any that can’t pass our stress tests. Phone calls are returned daily, the CRM is posted, and asset allocations are continually reviewed. Having done this for each of the 21 years of our existence builds confidence and tempers emotions. Over the next few days, the markets will test our patience and we’ll likely see more volatility in the prices of our securities. That will no doubt produce some loss-trading opportunities in our after-tax portfolios and some dollar cost averaging opportunities in our before-tax portfolios. Price action that occurs in a straight line from lower left to upper right would be far more preferable, but it just doesn’t happen.
Insulting our president-elect would probably insult half of you, while sympathy for his failed opponent would no doubt agitate the other half, so we’ll stay away from taking sides. Politics and investing are both highly charged with emotions. We are on top of our game when we separate emotions from actions and focus on making our clients money. There will be several new presidents before the end game plays out for all of us….the long term is the only term.