How can I protect my portfolio from a post-election drop in stocks?
By Dan Moisand | August 12, 2020 | Comments Off on How can I protect my portfolio from a post-election drop in stocks?
How can I protect my portfolio from a post-election drop in stocks?
Concerned about how this election will come out? You are not alone. Unfortunately, the prevalence of negative campaigning can add to our angst and uncertainty. Fortunately, market history is clear – trying to maneuver a portfolio based on how an election proceeds and how we feel about its outcome is speculative and not something a prudent investor needs to do.
To help you reconnect with the prudent investor inside you and push away the speculator that is trying to divert your attention to the short term, we share below some past posts related to this topic. This time really is different but every time has been different too. What has never changed is that your odds of having a successful investment experience over your lifetime are better as an investor than a speculator.
Our clients are appropriately positioned for their long-term goals and their investments are managed by a MFT team that knows how to handle news, noise, and both good and bad market behavior.
Our clients are appropriately positioned for their long-term goals and their investments are managed by a MFT team that knows how to handle news, noise, and both good and bad market behavior.
Posts about elections and markets
Will the election cause a market crash(2019) Seeing that emotions would be especially high in 2020, this was our attempt to nip election angst in the bud. It includes a brief history of negative campaigning and market behavior around elections.
Assessing the “Trump Bump” – What to Do Now(2017) Describes the futility of market timing and describes differences between how investors and speculators answer fundamental questions about market behavior.
Posts about good plans and making them work
For successful investing, control your intake of news (2012) Most successful investors have learned to focus on what can be controlled. You can control your intake of news or, it can control you. This posts describes five points that can help you take control of your news intake.
We continue to help the Orlando Sentinel with reader questions by participating in a free call-in hotline and its Ask An Expert feature. Some links require a subscription to view.
Dan Moisand,CFP® wrote the cover article of the Journal of Financial Planning‘s June issue. It covered some of the things Dan has learned over the years through many bad market environments and how good financial planning is critical to financial security. “When I see someone made a bad financial decision, I can usually trace the problem back to a lack of a plan, a bad plan, abandoning a good plan, or failing to revise a plan as needed.”
Moisand Fitzgerald Tamayo, LLC again made Financial Advisor magazine’s list of America’s top Registered Investment Advisory firms, and was again awarded a top rating and named one of Florida’s 12 Top Financial Advisors and Wealth Managers by independent rating firm Advisor HQ. The Financial Advisor list is based upon assets managed while Advisor HQ‘s uses other qualitative criteria.
Charlie was a source for a special feature on financial literacy produced by Investment News. Charlie was instrumental in a succesful six-year campaign to get public high schools in Florida to offer a financial literacy course as an elective. “As financial planners, we get it,” Fitzgerald said of financial literacy. “We see the benefits of smart money decisions. We see the consequences of bad money decisions. You’ve got to start this education before young people go into the adult world.”
As is the case every year, scammers are actively trying to rip people off through various scams pretending to be the IRS, Social Security Administration, the Sheriff’s office, or another government agency. Also common are so-called “phishing” emails that look like they come from legitimate financial institutions you may do business with. Now with Covid, new scams have arisen. For instance, fraudsters are pretending to be contact tracers or testing centers. The Federal Trade Commission has a page dedicated to some of these new Covid related scams. Locally, the Food and Drug Administration recently warned a Melbourne firm, H-Lab Life about making unsubstantiated claims that their products “…are intended to mitigate, prevent, treat, diagnose, or cure COVID-19 in people.”
Always be cautious, learn the characteristics of fraud, and don’t hesitate to call us whenever you are in doubt about the legitimacy of any communications your receive.
Day trading remains an extraordinarily effective way to lose money
The interest in actively trading stocks ebbs and flows. Despite its lack of profitability, many tried and most failed miserably. The popularity of the tactic seems to move to various areas around the world. The fad may be returning to the US as unwary (typically young) traders erroneously think a lack of a trade fee makes trading free. No matter where day trading becomes popular, the results are awful. Nobel prize winner Burton Malkiel recently warned against day-trading, citing two recent studies. In Taiwan, “It turned out that less than 1% of day traders were able to beat the market returns available from a low-cost ETF. Moreover, over 80% of them actually lost money,” said Malkiel. In a similar study in Brazil, “only 3% of day traders made money, and less than 1% made more than the Brazilian minimum wage,” added Malkiel.
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Dan Moisand is a fee-only financial advisor with Moisand Fitzgerald Tamayo, LLC. He is a regular contributor for multiple outlets, including Florida Today, MarketWatch, and The Wall Street Journal. His writing and financial advice have also been featured in Financial Planning, Investment Advisor, Wealth Manager/Advising Boomers, Forbes, Smart Money, and The New York Times, among other publications. He is the only two-time winner of the Journal of Financial Planning’s “Call for Papers” competition and has been named a top financial planner and advisor by multiple publications. Investment News named Dan one of the “twenty most influential men and women” in the history of financial planning. He currently serves on the Board of Directors for the CFP (Certified Financial Planner) Board.
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Mike Salmon, CFP® answered a question about the tax filing deadline and contributing to a Roth IRA. Charlie Fitzgerald, CFP® gave guidance to a woman deciding between receiving a lump sum payout to her IRA and a monthly check from a pension plan. Derrick Chandler, CFP® discussed how to reduce capital gains taxes when selling a second home.
Dan had a few thoughts to share with CNBC about how the coronavirus crisis differs from the Great Recession.