The inauguration of President-elect Donald Trump is about two months away, but there is still time to reassess your financial strategy if you planned for Vice President Kamala Harris to win.
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With a different political outcome, now is the time to make key adjustments — from tax planning to investment strategies — to ensure your financial goals remain on track despite shifting political sands.
GOBankingRates asked the experts, “So, you made financial moves thinking Harris would win. Now what?“
Expect the Unexpected
Under a Harris victory, some investors would have expected a continuation of many Biden-era policies, especially those that helped the United States recover from the COVID-19-induced recession, said Stuart Schiffman, founder and managing partner of Compound Wealth Advisors.
However, the President-elect has discussed reducing regulatory oversight, mass deportations and tariffs, which could lead to inflation, create scarcity and increase the cost of imported goods, Schiffman said.
“Any anticipatory actions on the part of investors to changes brought on by the Trump administration are speculative,” he added. “We just don’t know for sure how the policies of the incoming administration will be enacted.”
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Benefit From Tax-Advantage Strategies
While the Tax Cuts and Jobs Act (TCJA) was set to expire in 2025, the Trump administration may continue to push for tax cuts or extension of existing rates.
“For boomers, this could mean more disposable income or potentially lower taxes on investment income,” said Christopher Stroup, the founder and president of Silicon Beach Financial. “To plan accordingly, boomers should reconsider taking advantage of tax-deferred retirement accounts while tax rates are higher.”
The Trump administration has expressed interest in reducing or even eliminating the estate tax, which could have significant implications for high-net-worth earners planning their estates — the $11.18 million individual estate tax exemption set in 2018 is part of the TCJA set to expire in 2025.
“If the Trump administration continues to push for reductions or repeal of the estate tax, individuals with estates approaching these thresholds could benefit by reassessing their estate planning strategies,” Stroup said.
Adjust Your Portfolio
With a different political outcome, investors may need to reconsider their sector allocation.
“If the new administration leans more toward deregulation and pro-business policies, traditional sectors such as financials, energy and industrials may perform better than previously anticipated,” Stroup said. “Investors may want to shift some assets out of growth-focused sectors like renewables or healthcare stocks and into value-oriented sectors or those benefiting from tax cuts or regulatory rollbacks.”
Trump’s shift in energy policy favoring coal, oil and gas means that renewable energy companies might face headwinds due to reduced federal government subsidies or contracts.
“For boomers with exposure to solar or wind energy stock, it might make sense to diversify into more traditional energy sectors like oil and gas,” Stroup said. “They may also want to consider companies that benefit from deregulation, like energy infrastructure and pipeline companies, which may see increased demand and investment under a pro-business administration.”
Consider Investing In Tangible Assets
Schiffman said that tangible assets do better than financial assets if inflation rises significantly.
“Tangible assets like gold and commodities will rise, and those financial assets that are linked to rising prices like TIPs (treasury inflation protected securities) and REITS (real estate investment trusts) will maintain their value,” Schiffman said. “Rising interest rates, resulting from inflation, tend to decrease the value of financial assets like stocks, whose value is determined by the present value of their future earnings. Future earnings are worth less when the discount factor, interest rates, rise.”
Stay Informed
Global factors, natural disasters and shifts in political wind change the course of public policy.
For example, President-elect Trump suggested reversing his cap on state and local tax deductions. However, there is a lack of certainty regarding parts of Trump’s comprehensive economic approach, said Wayne Winegarden, an economist at the Pacific Research Institute.
“There are potentially very pro-growth scenarios where the tax changes improve our economic growth potential,” Winegarden said. “There are also anti-growth scenarios where the tax changes would be a net negative, particularly not extending some parts of the 2017 tax cuts, removing the SALT cap, exempting tips from taxation and imposing high tariffs.”
Nevertheless, staying informed could help you navigate the financial uncertainty that comes during political and economic policy changes.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Experts: So You Made Financial Moves Thinking Harris Would Win — Now What?
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