Never too early to plan.
As we head into the final months of a long 2020, the two concerns weighing most on investor conversations are the upcoming election and Covid-19, both of which may continue to linger through December without resolve. Rightfully so, these are pressing issues, but if we unpack each of these perceived risks, we come to the conclusion that financial market participants are much more focused on stimulus, rather than the virus, and that the political tilt in Washington is likely to have a far greater influence on taxes (and estate planning) than on future investor portfolio returns.
Our research suggests that there is low correlation between which political party occupies the White House and forward returns over a multiyear period. What matters more than blue or red is where we are in the economic cycle and market valuations at the inauguration of a new president. While the political uncertainty may not change our views, investors should start thinking about taxes and planning. A blue sweep could result in higher income and estate tax liabilities for high net worth individuals as soon as 2021. The current environment underscores the importance of continually reviewing your personal financial plan. Please take the time to have individualized discussions with us prior to year-end to determine how these issues may impact your unique planning needs.
Your Edge Team