Daily Money - Issue #258: Ready for the election?

plus wife carrying + Zendaya
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October 23, 2024 • Issue #258
Dollar Scholar

Hi y’all —

In 2020, I prepared a small feast for election night. I knew I was bound to spend hours nervously snacking as I watched the results roll in, so I made sure to have popcorn, Puppy Chow, pretzels and potato chips on hand. I capped off the coffee-table cornucopia with a pack of Tums for my inevitable heartburn.

This year, I'm thinking about election prep in a different way. The 2024 race is so heavily focused on the economy — inflation, jobs, taxes — that it has set off my Money Staffer Spidey Senses. In lieu of frantic trips to the grocery store, I want to take deliberate steps that will leave me in a good financial position no matter which candidate wins.

What should I do to get my wallet ready for the presidential election?

✅ Leave my portfolio alone.

Dan Sudit, partner at Crewe Advisors, says the first thing to do is… chill out.

"Especially if you're young, I don't think you should really be relying on any particular geopolitical event to make [financial decisions] because we don't know what the outcome will be or what it will result in as it relates to investments," he tells me.

In such a divisive political environment, it's understandable for investors to think that a particular victor will lead to a particular outcome, but "that's not necessarily the case as much as it relates to immediate implications for the economy," he adds.

Indeed, according to Fidelity, presidential elections are simply not market-moving events. A historical review shows markets tend to be nonpartisan — under various combinations of Democratic and Republican presidents and congressional majorities, the average annual S&P 500 performance has been positive going back to 1933.

Rather than politics, Sudit says my investment decisions should be rooted in the basics. Emotional, knee-jerk reactions are never advisable in investing, but that especially applies to elections.

"If they're long-term dollars, they should be focusing on the long term," he adds. "Because this will happen, believe it or not, every four years."

✅ Stop overreacting to the news.

Sudit says that the president has less control over my personal finances than I may think. Congress controls the purse strings, technically, and independent agencies like the Federal Reserve are not supposed to be politicized.

Flashy headlines should be taken with a grain of salt, Sudit says, because "there is no guarantee" that any political event is going to have the ripple effect people tend to expect.

Basically every debate now starts with “the economy, the issue that matters most to voters” and then quickly moves on to … (gestures wildly)

As an example, he points to the surge in gun sales ahead of the 2016 election. Democrat Hillary Clinton was widely expected to win, giving gun enthusiasts anxiety about whether they'd still be able to access firearms. When Republican Donald Trump nabbed the presidency, that worry (and demand) almost immediately evaporated. Share prices for gun manufacturers like American Outdoor Brands and Sturm, Ruger & Co. fell sharply.

The lesson? "What seems like a logical outcome is not always the case," Sudit says.

If I'm really searching for tea leaves to read, I can look at objective economic indicators like unemployment data, inflationary pressures and shifts in interest rates and interpret them accordingly.

✅ Think about upcoming purchases.

The New York Times published a story Sunday about how "consumers tend to get skittish about major purchases like houses, cars, weddings and investments" right before elections due to the unignorable pall of uncertainty. It's not a bad idea for me to evaluate my timeline for any big-ticket buys.

Say I'm considering buying an electric vehicle, or EV. Former President Donald Trump has suggested he'd end the $7,500 EV tax credit, which can be applied like an instant rebate at the point of sale, that the Biden administration passed. That means purchasing a new EV could essentially cost me $7,500 more if Trump were to win and I happened to wait until the spring to go to the dealership.

A similar phenomenon is happening with houses. Redfin reported recently that 23% of folks who hope to buy their first home in the next year said they are waiting to take the plunge until after the election. Specifically, they're eyeing Vice President Kamala Harris' plan to provide $25,000 in down payment assistance.

Although there's no guarantee any candidate's campaign promises will come to any sort of fruition, there's *a chance* I could save money on these big purchases if I timed them carefully.

✅ Revisit the fundamentals.

Sudit says one way to combat anxiety about the election results is to make sure my own house is in order. If I can shore up my emergency fund — which should ideally include three to six months' worth of everyday expenses in an easy-to-access account that at least keeps pace with inflation — I'll feel a lot better.

That way, if everything goes wrong, I'm "immunized from [that] being catastrophic to your personal well-being," he says. It's a financial buffer of sorts.

Generally, though, I should try to remember that the election doesn't exist in a vacuum. We also just saw the start of (what's expected to be) several Fed cuts, which will likely eventually decrease the cost of borrowing. It's hard to predict what economic event will happen next, so it's best to insulate myself as much as I can.

The bottom line
(but please don't tell me you scrolled past all of my hard work)

There are a few small financial tasks I can check off my to-dol list, but I should avoid doing anything drastic with my money ahead of the election. Slow and steady wins the race here.

Y'all ready for this election?
via Giphy

Smart MONEY MOVE
leave your (metaphorical) baggage behind with travel insurance

TravelIf you’ve ever suffered travel drama like cancellations, medical mishaps or lost luggage (ugh), then you know how quickly a dream getaway can turn into a nightmare. Enter travel insurance. The right policy can protect your hard-earned dollars while providing the peace of mind we all crave while traveling. Make sure you’re covered in case of unexpected disruptions — you’ll be jet-setting in no time.

Check out our list of top-rated travel insurance providers.

ADVERTISEMENT

Receipt of the week
check out this wild celebrity purchase
Zendaya
via Instagram

Zendaya's stylist, Law Roach, recently talked about the role money has played throughout their 13-year working relationship. "People would be like, 'Oh, the rates are too high,' and she'd say, 'Well, you gotta pay that rate,'" Roach said on the Naked Beauty podcast. "I think to ultimately show people that you care about them, you have to be able to change their financial situation. And that's what she's done for me."

Internet gold
five things I'm loving online right now
1
I just learned about the North American Wife Carrying Championship, which per its website "challenges couples to conquer a 278-yard obstacle course — over hurdles, through a muddy water pit, and up a steep sand hill — all for the chance to win the wife's weight in beer and five times her weight in cash." This year's contest, the 24th, didn't require competitors to be married (or even be man and woman). Justine and Caleb Roesler won for the third consecutive year — see a video here.
2
You can now order Doritos nacho ice cream and cool ranch sushi, if that's your thing.
3
To make Colin Farrell into Penguin, it took 800 prosthetic face pieces, 105 gallons of silicone and five pounds of hair. “Imagine, like, a bunch of people at 2 in the morning forcing you to sit in a chair and going, like, ‘OK, we’re going to shave your eyebrows now, and we’re going to dump glue all over your hair,’” the designer told the Wall Street Journal story. “And by 11 p.m., we’re scrubbing it off. It’s not pleasant.”
4
Stop what you're doing and go watch the Andrew Garfield episode of Chicken Shop Date immediately.

401(k)ITTY CONTRIBUTION
send me cute pictures of your pets, please
A kitten
via Roy Roddey
These brothers, Johnny and Frankie, are taking a catnap because they already feel prepurred for the election.

See you next week.

P.S. I loved your replies to last issue about bank branches! Scholar Tom told me he rarely goes to his brick-and-mortar bank, but Scholar Shannon said she stops by twice a month (often to take care of tasks she can't do at home). Scholar Christine said she loves the lollipops and that her parents prefer to deposit checks via the bank drive-thru as opposed to mobile apps. All good points.

P.P.S. Are you doing anything specific to prepare for the election? Would you try Doritos ice cream? What snacks should I make this year? Send ideas to julia@money.com

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