Here’s a roundup of advice from some certified financial planners.
Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Fla., says politics should not play any part in your investment decisions.
“People should have an appropriate asset allocation based on their goals, time frame, and financial and psychological ability to take risk,” she added. “Don’t pay attention to the noise that politics creates.”
Larry Stein, president of Disciplined Investment Management in Deerfield, Ill., says Trump was getting too much credit for the market rise anyway.
“The bump was driven largely by stronger than expected [corporate] earnings, much of it due to surprisingly strong results overseas,” he said.
Stein says the uncertainty now building in the U.S. political environment may have a negative impact on stocks, which is why he says investors might want to add global stocks to their portfolio.
“Stocks are for long-term goals, and investors should try not to focus on short-term fluctuations,” said Michael Guillemette, assistant professor of personal financial planning at Texas Tech University, who echoed Stein’s advice on diversifying your holdings.
Robert Schmansky, president of Clear Financial Advisors in the Detroit metro area, said, “By the time we hear the latest news, it’s already too late to act. The best plans are long-term, and recognize we will have rocky periods. If you have a lot in the market, consider adding investments that may not correlate with stocks, like precious metals and real estate. Probably the best thing you can do is replay 2008’s market in your mind and think about if you were better off worrying or sticking with your plan. Most investors did best by sticking it out and staying invested.”
A. Scott Ward of Johnson Sterling in Birmingham, Ala., still sees room for growth. “The core questions for long-term investors remain the same. To what extent, if any, does volatility change your financial goals? Do you have any reasons to doubt that U.S. companies can find ways to grow and thrive in the next 20 years, regardless of the political circumstances?”
Barbara Roper, director of investor protection for the Consumer Federation of America, says it’s “generally a mistake to focus on short-term ups and downs in response to the politics of the day or anything else. Doing so risks making poor market-timing decisions based on an emotional reaction to the news.”
Perhaps the Trump drama will lead to a stock slump. But what goes down can also go back up. The important thing to remember is that you’re in it for the long haul.
Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20071; or firstname.lastname@example.org.