Election Mayhem and the Markets – Our Thoughts

Election Mayhem and the Markets – Our Thoughts

Is this really our new world that we are all witnessing? Given what we see on the nightly news, the venom we read on the internet, and the level of acrimony that exists between the two warring sides of the 2020 election, you’d think the end of times are at hand.

Listening to each side with less than six weeks to go, one would assume they live in different countries or even on different planets (supposedly there is life on Venus!)

But in reality, they are watching different cable news channels and reading different websites in an unyielding effort to achieve confirmation bias. It’s as if one cable news channel is always right, and the other guy is always wrong. Does anybody really believe that?

If two cable channels with entirely opposing views are wrong, mislead, or purposely avoid sharing information at least 30% of the time (pick your own estimate, it’s as good as mine), then what portion of their programming is false? Fact checkers to the rescue…well unless they too are biased!

So, our options are these…we can be partially informed, uninformed, or misinformed…what a choice! How is the average voter supposed to decide?

One Thing is Certain…

…Financial markets hate uncertainty.

Polls are telling us something close to what happened in 2016, which is to say they are a function of the assumptions made by pollsters. Who is being sampled? What are they being asked? Who is willing to sit through a polling call? How many questions are being asked? Are the people being polled registered voters? Are they likely voters? Are they telling the truth about who they will vote for? How are they going to vote? When are they going to stop counting the votes? Who gets a ballot mailed to them? What ballots are going to be rejected?

Our job at Modernize Wealth is to try to pick the bones out of all of this…and anticipate how the markets are going to react. Really?

Guided by History

History, as is often the case, gives us clues. We have endured pandemics before, as well as contested elections. Rutherford B Hayes won a heavily contested election in 1876 after losing the popular vote to Samuel J Tilden but winning the electoral college after…wait for it…disputed ballot counts. Sound familiar?

We are spending a fortune to overcome the pandemic, and it may yet bankrupt our nation. We’ve been there before. The US was bankrupt after the Revolutionary War, Civil War, the Panic of 1873, 1893, 1896, 1907, 1910, after World War I, the Great Depression. Too long ago? Some of you may remember 14% unemployment and 21% interest rates in 1980? We should easily recall the Tech Bubble bursting, and the financial panic of 2008? Yet how soon we forget.

So… What Do We Plan to Do?

The team at Modernize Wealth is planning to deal with this potential mess and mayhem by hedging our positions as we get closer to the election to preserve wealth for our clients; then removing our hedge positions as the fog of election mayhem subsides.

We need to recognize that investments will be significantly affected by the eventual outcome, which may not be known for some time after the election. Tax policy, regulations, the Courts, labor policy, foreign policy, education policy, not to mention domestic security are going to be affected by the outcome. Throw in the wild card of COVID-19 vaccines and new treatments, and you’ve got a perfect storm with no clear way to stop it.

Contact Us

Our aim in the coming months is to ride out this perfect storm; to plan for wealth preservation and to look for opportunities when they invariably surface. Caution: this upcoming ride will not be for the faint of heart or the inexperienced investor.

If you would like to share your thoughts on this topic with us, we welcome the discussion! Let’s talk! Call us at 480-346-1283, or email hello@modernizewealth.com and we will schedule a conversation.

Buckle up…2020 has been a year unlike any other….but its not over yet!

A Business Owner’s Guide to Our Brand New World | Part 1

By John M Hebert CPM® CFP®
A Business Owner’s Guide to Our Brand New World | Part 1

I think it’s safe to say that we live in a world of rapid technological, economic and social changes. If you’re a small business owner like me, it sometimes seems as though these changes affect us more than someone who draws a paycheck from a large corporation or a government entity. In our view the recent events concerning COVID-19 have only reinforced this perception. So what should we expect going forward?

Without resorting to a crystal ball, trends that began before a crisis arises will often accelerate dramatically in response to fear, necessity, or both. The list of trends and forecasts are likely to impact the small business owner;  understanding how these trends will affect you will be indispensable, enabling you to not only survive, but thrive.

How future employees are educated will change dramatically

This is personal for me since I spent the better part of a quarter of a century in a classroom teaching working adults. In 1987 (yes Reagan was still President) when I taught my first class, online education didn’t exist; when I retired from the classroom, the University of Phoenix (UOP) was almost entirely online. In the early years, UOP was derided for its foray into online education by the traditional university world. Today every university has an extensive menu of online classes.

With today’s tuition rates out of reach for middle class parents, look for inexpensive online classes to proliferate to the point where college degrees can be earned by anyone, anywhere at any time at an affordable price. Gone are the days of hoping to get accepted at an elite university limited by classroom space and indecipherable standards for acceptance. Work and education will become permanently intertwined. Employers will need workers with new skills and will steer employees as to where they can obtain such skills… increasingly available online.

Remote employment and services will appear in places you never imagined.

We have lived in a world of rapid technological change for some time. What we may not have fully appreciated is how this change will affect every aspect of our daily work lives. Business owners will by necessity need to ask themselves if the amount of real estate used today will be needed in the future. Shared office facilities for everything from testing products to college exams will likely vastly increase. Remote employment, increasingly more common, will likely become the dominant place of work for millions of office workers who may not currently be working from home.

Efficiency has always been the key, and will be more so after the current crisis ends. There will be winners and losers in the process. Those businesses that adapt rapidly to the new models going forward will win in the long run.

Questions or Concerns? Reach out!

The Modernize Wealth team will have many more trends and strategies for business owners, the bedrock of the economy, moving forward…so stay tuned.  Please reach out to me at 480-346-1283 or email hello@modernizewealth.com if you have any questions, or just want to discuss further.

About the Author

John Herbert’s financial industry gravitas comes from almost 30 years’ as a Certified Financial Planner and Certified Portfolio Manager. An accomplished educator, John taught Economics at Chapman University and the University of Phoenix for many years. Sensitive to finding a balance between business, family and finance John has always had a passion for helping people build long-term wealth for their families.

Four Investment Concepts for Volatility

Four Investment Concepts for Volatility

What can you do in times of volatility to make sure your financial investments stay in line with your goals? Brandon Hebert,  CPWA®, CEPA®, CEO of Modernize Wealth, presents four quick tips to help you figure out where to start when it comes to evaluating your investments. If it’s been a while since you did an investment evaluation, especially given the long bull market we’ve just experienced, take a couple of minutes to watch this.

If you have any questions or want to talk about your investments and your financial goals, call us on 480.346.1283 or email hello@modernizewealth.com.