“God does not call the qualified, He qualifies the called.” Sounds like a good message in these stressful times. I just wanted to respond to the Georgia senate race and how that will affect your investments. Now that the elections are completed, it looks like we have a far-left agenda that will be introduced to Congress. Whether you agree with that agenda or not, you need to be aware of how that will affect your investments, retirement plan, and taxes.
First, markets move over the short term based on events such as an election or COVID or shutdowns. Markets move over the long term based on Corporate profits and economic numbers. I am interested in the latter. We need to stay invested and carefully watch the economic numbers and Corporate profitability. We need not be distracted by politics or short-term events.
It is relevant to look at tax increases and regulations because both affect our pocketbook and Corporate profits. As a result, if measures are passed that will affect our cash flow and Corporate ability to create profitability, we should make adjustments in our projections and at times in our investments.
My commentaries are more important than ever because they will keep you informed about Congressional action, regulations and the sustainability of stock movement.
I do not believe that over the next year we have anything to worry about since it will take time to pass any measure that purports to increase taxes. Any measures that will give free education or forgiveness of loans or free medical care to be studied so that we can determine how that will affect our finances. All these measures are not guaranteed to pass even with a Democratic majority. Many Democrats are moderate and will be a barrier to any measures that have far-reaching negative impact on the country.
Finally, do not panic! This is time to take measured steps and to be wise about any move in our accounts. Nothing is guaranteed when it comes to politics. Platforms are meant to get someone elected, but the reality is that anything extreme will have a hard time passing even with the current makeup of Congress and the presidency. In addition, all politicians are aware of the number of people that voted for Trump and those that voted, not for Biden, but against Trump. That is not a mandate to push a far-left agenda. But, of course, we will watch and adjust if needed.
Happy New Year to all of you and please do read these commentaries and ask questions when they arise as they are my best way of communicating the truth of the markets and economy regularly and in a timely.