Finding your post-election financial confidence
Dear Eagle Wealth Community,
Boy, has this past week felt like a year? If you're feeling anything like we are, you're exhausted from news overload, burnt out on election talk, and are ready to move past all the uncertainty. You might be tired and stressed. So, we hope you remember, when it comes to your personal financial plan, we have your back.
It should come as no surprise that the economy has been one of the most crucial issue in this year's election.
But here's something that may surprise you. More than 90% of investors said they planned to change their portfolio in the 12 months following the election.[i]
Some are preparing to adjust their stock holdings, while others are looking to adjust their bond positions. Some say they expect to boost their cash portion, while others consider doing "something else financially" as a result of the election.1
During each election cycle, it's common to see surveys that ask investors, "Do you plan to make any changes to your portfolio as a result of the election?" It's only the confident, bold, and patient investor who answers, "No. I don't plan any changes."
Second-guessing your investment strategy is natural, especially with an election season like we’ve seen. Emotions are running high as investors consider our new president's positions and how they may influence the economy.
But this election cycle, challenge yourself to be confident. To be a patient investor who knows that investing involves risks, making decisions based on your goals, time horizon, and risk tolerance. Be the bold investor who knows that sound analysis should drive portfolio decisions, not a knee-jerk reaction to a current event.
If you have concerns about how the election will impact the economic outlook, we invite you to join us on Thursday for our live webinar (see details below). We hope you're doing okay and taking care of yourself.
Wishing you a less chaotic week,
Your Eagle Wealth Team
At the beginning of the summer, we shared our team bucket list with you. We worked and played hard all summer long. Let's look back and see how we did.
- Chad succeed in his mission to camp a few times a month with his girls and get out on the paddleboard (whether or not he stayed on it is a different story).
- It's safe to say that Mat more than accomplished his goal of competing in the Ironman triathlon. He placed 8th overall and 2nd in his age group and now qualifies for the 2021 IRONMAN 70.3 World Championship.
- Cami captured one of Central Oregon's most beautiful sunsets in the Cascade mountains.
- Suzanne and Gabe did in fact celebrate their 10th wedding anniversary in Yachats along the Oregon coast.
- Brody summitted South Sister and Broken Top.
- Ian also hiked up South Sister.
You may notice not everyone is included on our list. It's important to show you the entire picture, even if it includes unmet goals. That's the thing about to-do lists, things don't always go as planned. We want you to know that just because plans fall through or circumstances change, we keep moving forward. On to our winter bucket list!
The Week on Wall Street
Stocks soared last week as investors anticipated that a split Congress would raise legislative hurdles to changing corporate taxes and adjusting regulatory oversight of big technology companies.
The Dow Jones Industrial Average jumped 6.87%, while the Standard & Poor’s 500 tacked on 7.32%. The Nasdaq Composite index surged 9.01% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 7.65%.[i],[ii],[iii]
Bulls Take Charge
Coming off a poor close to October, stocks surged throughout election week, jumping higher in pre-election trading on bargain hunting and strong factory activity. The rally picked up steam as Americans went to the polls and shifted into overdrive Wednesday morning.
Investors were buoyed by Congressional results that indicate that the next president would have to work with a divided Congress. Though a divided Congress might result in a smaller potential stimulus package and continued gridlock, investors seemed to believe that was outweighed by a diminished risk of higher taxes, greater regulation, and policy initiatives that might be challenging to businesses.
Stocks took a pause to close out the week, even as a solid jobs report saw the unemployment rate fall a full percentage point to 6.9%.[iv]
Yields Gyrate
Overlooked amid the powerful rally in stock prices was the swing in yields last week. Action in the bond market is important since 10-year Treasury yields are a benchmark for setting borrowing costs for businesses and they represent another view on the strength of the economic recovery.
The 10-year Treasury note rose as high as 0.942% during after-hours trading on election evening and dropped to 0.768% by the end of normal trading hours on Wednesday.[v]
THIS WEEK: KEY ECONOMIC DATA
Thursday: Consumer Price Index (CPI), Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, November 6, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: McDonald’s Corporation (MCD), Simon Property (SPG)
Tuesday: D.R. Horton (DHI), Rockwell Automation (ROK), Datadog, Inc. (DDOG)
Wednesday: Air Products and Chemicals, Inc. (APD)
Thursday: Tencent Holdings (TCEHY), The Walt Disney Company (DIS), Cisco Systems (CSCO), Applied Materials (AMAT)
Friday: Draftkings, Inc. (DKNG)
Source: Zacks, November 6, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
