NEW YORK — No matter who wins the presidential election it is important that you review your retirement accounts to see what they are being invested in.
According to Kiplingers.com, the stock market has, for the most part, ebbed and flowed with the four-year election cycle for the past 182 years. Wars, bear markets and recessions tend to start in the first two years of a president’s term. bull markets and prosperous times mark the latter half. Since 1833, the Dow Jones industrial average has gained an average of 10.4% in the year before a presidential election, and nearly 6%, on average, in the election year. By contrast, the first and second years of a president’s term see average gains of 2.5% and 4.2%, respectively so in order to make sure that your retirement account doesn’t take a big hit review it with your financial adviser to make sure it is not that volatile.
So, with election day around the corner, here’s what you need to do:
Reduce Your Debt
Usually after a presidential election the job market becomes uncertain and as you continue to become more financially empowered you want to reduce the amount of money you owe to other people to assure you can whether any storm. When you have fewer financial obligations to others, you are far more likely to weather unexpected storms. Consider snowballing your debt by paying off your lower balance debts until you pay off all.
Pay Yourself First
You will never know how a new president will affect jobs, business, and economic policy so you want to make sure that you have 6-8 months of expenses saved in a High Yield savings account no matter who wins. This assures that you have a cushion available to take care of your everyday needs. Do this by saving at least 10% of your income every time you get paid.
Taking care of your health is one of the best ways to protect your finances and no matter who wins the election you want to make sure that you are protecting your ASSets! Making sure you are insured including health and life insurance is essential. Making sure that in an event of unforeseen tragedy your life isn’t shaken up.
Diversify Your Investments
Similar to why you want to review your retirement account, you also want to make sure your investments are diversified. Especially making sure that you have stocks that benefit from infrastructure improvements and are domestic companies since both Donald Trump and Hilary Clinton are pushing to increase spending in both these categories