Are you ready for it? It's coming. You best start preparing for it now.
You know what I'm talking about, don't you? It will be the root of a hundred client and prospect conversations.
You know, THE question.
What's going to happen to my portfolio if...
That's the root of it. The basic structure. But this is the granddaddy version.
(Shouting) THE BIG ONE.
…
(whispering) the political one.
What's going to happen to my portfolio if…
Biden stays in office?
Trump wins?
Desantis wins?
Kamala gets the ticket?
Democracy falls apart?
The Squad inherits the earth?
Current Supreme Court Jutices find the elixer of life?
Democrats add more supreme court justice to tip the balance?
Tax rates go up?
Tax rates go down?
We spend more?
We spend less?
The oceans rise and locusts swarm while fires consume the earth?
What's going to happen, Mr. or Ms. Financial Advisor? Can you tell me? Can you help me?
How do we respond to this? Do you elicit more feelings? Do you commiserate? Are you triggered? Does it send you into a panic?
“Oh, Good Lord, what IS going to happen,” you ask breathlessly before ending the Zoom call and wandering aimlessly through a field for days on end.
This year. These coming years, I invite you to do better.
Here’s how I recommend approaching the question.
Politics and Investments Don’t Mix
We all know that ‘feelings’ are an input best avoided regarding investment decisions. It doesn’t matter how you feel about the market or the economy; you should stay invested.
Similarly, political ‘feelings’ should be avoided like the plague when reviewing investments. How many people sat in cash (or gold) waiting for Obama to trash the economy? He didn’t, and stocks, from a low base, did exceptionally well under his tenure.
Similarly, how many investors pulled their stocks out of the market when Trump entered office? That was an equally bad idea. 2018-2021 saw GAINZ.
Sadly, countless advisors let their political feelings get in the way of sound advice. Politically obsessed advisors sabotaged their clients by moving them to cash, gold, or alternatives before the clients could even sabotage themselves. Yuck!
Remember, your personal fortitude matters. It’s not about instilling fortitude into our clients; it’s about embodying fortitude and steadfastness. We are committed long-term investors. We live these virtues, and our clients benefit from our perspective, patience, and optimism.
A Script
A client asks THE QUESTION:
Keep reading with a 7-day free trial
Subscribe to The Value of Advice to keep reading this post and get 7 days of free access to the full post archives.