Retirement Planning In 2020 Requires Understanding Current Events

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Yes, 2020 has been a year for the history books. Even that sentence feels like an understatement for all that we have experienced in just the first six months of this year: catastrophic natural disasters, a global pandemic, an ongoing revolution, and even a murder hornet invasion! With so much going on in the world, it can be easy to forget there is a presidential election coming in November. In less than five months, the U.S. will elect our next president and the election will be decided, in part, by American consumption.

The markets were great in June. In fact, the S&P was up 5% for much of the last month alone! This is due, in part, to the reopening of the country. As this continues, it appears that more and more people are going out to restaurants and various other activities that are legal again under the current phase of each state. If that continues and expands in the states that haven’t opened yet, the odds of Donald Trump winning the election increase since, historically, people vote based on their wallet.

The government has done a good job of inflating the market with stimulus packages the last few months and they hope that as the stimulus runs out, normal economic activity picks up. New York state recently voted to move forward with planning the US Open tennis tournament in August (albeit without fans present). In May, my home state of South Dakota voted to have the 80th annual Sturgis Motorcycle Rally, both of which show evidence that the country is ready to open up.

The events industry came to a screeching halt in March. Whether you attend an industry conference once a year or go to an event like the Democratic National Convention, all are handled by the events industry, which account for $325 billion in direct spending in the U.S. The events industry and companies that support it are big employers in Maryland and we can’t emphasize enough the positive impact we will see when it gets back on its feet. It affects all of us. The fact that events like the US Open and Sturgis Rally are going to be held, even in a modified way, is a big step to getting back on our feet. All of this can influence the election, which in turn influences the market.

It reminds me of being in the hospital after my wife gave birth to our third son. I was ready to go home; we’d done this twice before and I didn’t see the need to stay the extra day that the insurance allows. My wife said, “Why not stay the extra day? It’ll only help me heal physically and mentally and be ready to go back to life and adjust to the new normal once we get home.” The country has been in the hospital since March, and we’ve waited that “extra day” to reopen to help improve our chances of successfully adjusting to the new normal of living in this changed world. As a result, it should make sense that the market has been responding well with each passing day. The economy is responding favorably, which in turn can bolster Trump’s bid for re-election.

Economics has played a major role in every election this country has ever held and will be a key factor in this one as well. Unfortunately for Democrats, it appears that the economic outlook seems to favor Trump, but certainly the social issues that have dominated the press lately seem to favor Democrats. It’s imperative that whoever wins in November addresses both sides of these issues and as they do, its effects will be reflected in our economy and market, for better or worse. Creating an income plan for retirement means you’re planning for years, perhaps decades, in the future, and it’s crucial that you consider how an election and current events will influence your plan.

Jason LaBarge, Financial Advisor and Managing Partner at Premier Planning Group
115 West Street, Suite 400 Annapolis, MD 21401 443-837-2520 www.JasonLaBarge.com

Securities offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Advisory services offered through Summit Financial Group Inc., a registered investment adviser. Summit and Cetera are affiliated and under separate ownership from any other named entity.

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