With just 84 days to go until the presidential election on November 3, now is the time to "president-proof" your investments.
Democrat former Vice President Joe Biden currently looks the likely victor against President Donald Trump. Mr. Biden has led in poll after poll nationally and in almost every poll in the core six battleground states of Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin.
However, latest polls suggest that Mr. Trump’s position is no longer deteriorating.
Understandably, news agendas and conversations across the globe have been dominated by the impact of the pandemic for the last five months.
As such, it has been all-too-easy to forget that for investors the defining issue of the year was always meant to be the forthcoming presidential elections in the world’s largest economy.
Whoever wins the keys to the White House – Trump or Biden – we can expect some major policy shifts which could affect investments, taxation, regulatory landscapes and corporate earnings, amongst other issues, for the next four years.
There’s been talk of Joe Biden securing a "blue wave" Democratic sweep of the House, Senate and presidency.
Should this happen it would likely hit risk assets, including equities.
It also potentially could mean tax hikes for corporations and higher earners, the possible introduction of wealth tax, the break-up of Big Tech companies, environmental reforms, increasing regulation and more healthcare spending.
Trump, the incumbent, and Biden have divergent economic policies.
Trump’s agenda would likely include tax cuts, increasing infrastructure spending, and deregulation, which would be positive for stocks and other risk assets.
He could also be expected to increase his "America First" stance to international commerce and to double down on trade issues with China, the world’s second-largest economy.
As always in a presidential election, there will be investment winners and losers. This time they could be even more pronounced due to the two candidates offering very different administrations.
However, the priorities of whoever is in the White House can also change quickly to respond to unforeseen events – as we have all seen so dramatically this year.
Therefore, I would suggest that investors review their portfolios to ensure that they are as "president-proof" as possible so that they can take advantage of the opportunities and mitigate the risks regardless of who is the next president of the United States.
This means proper diversification across asset classes, sectors, geography and currencies.
Nothing can be taken as assumed in this critical presidential election. Investors should act now to grow and safeguard their wealth in any eventuality.
Nigel Green is founder and CEO of deVere Group. One of the world’s largest independent financial advisory organizations, de Vere does business in 100 countries and has more than $12 billion under advisement.
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