The day after election day 2020
Last week’s election fatigue, pandemic fatigue, work from home fatigue, and virtual learning fatigue, all the fatigues will have at least some resolution now that the election has arrived and passed. This week, we discuss the impending lack of certainty on an election result and the markets’ response.
Election Day
November 4th, 2020, the day after election day! The stock market soared in the beginning of the week, making up for some of the losses in October. Markets moved down about 8% for the month, nearing correction territory. Wednesday morning brings no election resolution and it could be another few days before we know the final results.
Markets
Markets showing optimism at least early Wednesday, that whoever wins the election, we are OK. The scenario that created anticipated anxiety in the markets was a drawn-out election and here we are. “Buy the rumor, sell the news” seems to be in operation. Reporting from the WSJ says markets are higher because of increasing likelihood that Biden will win. We will see how long that thought lasts.
Technology
When in doubt, revert to the reliable earners-technology. Apple, Microsoft, Amazon, Netflix, Google and Facebook seem to be the place to be today. They have replaced the golden oldie blue chips like GE, GM, Exxon, IBM, Merck, etc. Currently the Nasdaq is soaring far above the Dow Jones Industrial and S&P 500. Interest rates are down and the dollar is stable.
With the current political uncertainty, I will leave more discussion of the election impact until we know more next week. The country remains seriously divided and tribal with many dependable institutions under attack. Will the federal government unite to provide more fiscal assistance and job creation as the economy slows down? Covid-19 new infections continue across the country with records set in many states. What is the plan for the pandemic? I have confidence that we will figure this out and new opportunities will emerge. Just hard to see them when you are stuck in the middle.
Non-Election Related
For this week I am recommending listening to this presentation from a senior writer/editor at the Atlantic talking about the post covid-19 world. It is one of a series of non-partisan talks from the Chautauqua Institution in upstate NY. It is very thought provoking and hopeful in regard to the future of cities such as ours San Francisco, CA. Again, it is always a good time to step back from the daily overwhelm from the news and chaos to look forward at optimistic scenarios that come next. It is understandable if it is initially a strain to see it, but it is there.
As we approach the end of the year (!?), I’m reminded of the quote “the days are long, but the years are short.” 2020 has done that weird thing where it feels like this has been the longest year, but then we pick our head up and the fact that it’s November already comes into view and it’s a bit shocking that we are on the brink of a brand new year. Blurrrsday was in full effect for the greater part of this year, which is why I think it’s a bit surprising we’ve almost made it through a whole year.
End of Year Planning Considerations
With the end of the year upon us there are a handful of financial planning elements to be mindful of:
- No RMD requirement for 2020
- CARES Act retirement account withdrawals sunset 12/31
- If you’ve started a new job this year, make sure you have appointed beneficiaries on all new retirement accounts (in addition to updating beneficiary selections if updates are needed due to major life changes)
- Open enrollment. Many of you are in the midst of your open enrollment period at your workplace. Be sure to make your elections (or changes) to your 401(k) contributions- now’s as good a time as ever to increase your savings if your cash flow supports an increase deferral to your future self
- Choose (or change) your medical/dental/vision insurance if your needs have shifted
- Spend your FSA cash
Questions? We’re here to help! See you on the other side of the election.
