The transcript below has been edited for clarity:
Slide 1: 2020 Election Impact: What Investors Should Know
0:00 Laurent: Good afternoon, and welcome to Bell Investment Advisors’ “2020 Election Impact: What Investors Should Know” webinar. My name is Laurent Harrison. I’m a Senior Investment Advisor and a Financial Planner at Bell Investment Advisors. I’m joined today by Ryan Kelley, Chartered Financial Analyst and also Head Portfolio Manager here at Bell Investment Advisors.
0:22 Laurent: I’m really glad to be here with you today, given the election that’s coming up here in the next couple of weeks. We have a lot of information to share with you.
Slide 2: Webinar Overview
0:32 Laurent: Ryan?
0:33 Ryan: Thanks, Laurent. We want to discuss potential market impacts of a Biden or Trump win, history and examine some markets and elections (and if that’s influential), some Democratic vs Republican policies that may or may not impact the market, and the folly of betting on simplistic narratives with your investment decisions.
1:02 Laurent: I’ll be covering the “Investment Strategy Options, Explained”. That’s actually something that Ryan and I do back and forth as a team. A lot of clients will ask questions about emergency cash reserves, and there’s some best practices and things you can do currently that will help you either pre- or post-election. And lastly, there’s always a few activities and actions that you might want to think about and take in your accounts for Q4. And now, I’m going to pass it back over to Ryan and he’s going to take it away.
Slide 3: Increasing Chance of a Biden Win
1:35 Ryan: Great, thank you. A lot of clients may be aware of this, but one of the things that’s obviously been talked a lot about is the probability of a Trump or Biden win in the upcoming presidential elections. Biden’s chances of winning have increased recently. This chart here is an amalgamation of different polls of who voters would likely pick for president.
2:05 Ryan: You can see that the sharp uptick in blue represents Biden, and downtick in red represents President Trump. I should also note that there is another way to look at this, and that is that instead of using polls, you can look at what’s called the prediction markets. You can see on the following page an example of this. But essentially, investors get to bet on who they think is likely to win. Their theory is that people are more honest with their betting, their money, than they are answering a poll. But you can look at the same statistic in the betting markets, and it does also reflect a higher chance of Biden winning. It has also increased. The advantage towards Biden is narrower than it is in the poll average.
Slide 4: But Control Depends on the Senate
2:53 Ryan: But what really matters is not just who wins the presidency, but we are talking who will be able to enact legislative changes. That’s also going to depend on who controls congress. Now the House of Representatives, from what I’ve read, is almost certainly going to stay with the Democratic party in control of it. So, it really comes down to, who is going to control the Senate? Right now, it’s under Republican control. This chart, from the prediction markets or betting markets, shows the chance of a Democratic control of Senate. Right now, it’s favored to flip to Democratic control. What I’d point out is that even if you control it, the amount I’ve read is maybe 51 to 55 at most Democratic Senators vs Republican. That’s obviously not enough to overcome a filibuster challenge. If you assume that if there is going to be a President Biden, for him to pass a lot of meaningful policies require the House of Representatives staying democratic, which is probably going to happen. As well as Senate, not just being under Democratic control but actually willing to repeal the filibuster rule, which has been dubbed the so called “Nuclear Option,” which could happen. But I would also point out that Mitch McConnell is unwilling to take such an action in the first two years of Trump’s presidency, when the Republicans did control the House, the Senate, and the Presidency. So, it’s not such a sure thing.
4:34 Ryan: If they are unwilling to repeal the filibuster rule in the Senate, then you are most likely to, at least in the first few years until the mid-term elections, not get much done policy-wise because it’s likely the Republicans would block most major political changes that the Democrats would want to pass for those first two years. Even if they don’t control the Senate, they would still have enough to get in the way.
Slide 5: Regardless, Markets are Rallying
5:03 Ryan: One narrative I read about a lot, and some clients have heard or may believe, is that a Democratic win (if Biden wins the presidency) might be bad for stocks. That’s possible, but what I would point out here is on the chart, as his chances of winning go up (which is represented by the white line), the stock market itself in the U.S. has gone up. This is specifically looking at the Nasdaq, a tech heavy stock index. So again, his chances are going up and yet the stock market is going up at the same time. You could say that the stock market wants him to win, or you could simply draw the conclusion (which is more likely) that the impact of the election is just not that meaningful for the stock market. It’s focused on other things. Worst case is not all that concerned with him winning, if not outright favoring it.
Slide 6: The U.S. Stock Market has Increased Under Both Parties
6:00 Ryan: And again, that makes sense because you can see on this chart that is a long-term perspective of the U.S. stock market, that it actually has gone up under both parties. We don’t really have Republican markets or Democratic markets. It’s just tended to rise over time regardless of who controlled things. Part of the reason is that there are more impactful things than just politics that can play, as we discussed previously. Who actually controls the White House doesn’t necessarily have the power to push through whatever is on their wish list. And you’ve got compromises, etc. This just hasn’t been a meaningful factor, as you can tell from the following slide.
Slide 7: No Clear Relationship Between Elections and Returns
6:48 Ryan: To quantify this, Vanguard did a study. I’ll show this on the next slide as well. They looked at two different factors. One, this is showing a balanced portfolio. It’s 60% U.S. stocks, 40% U.S. bonds. It’s a pretty typical, classic balanced portfolio. You can see they went back a long way, back to the 1800’s. They wanted to say, what was the average return in an election year or a nonelection year? You can see from the results at the bottom that there was actually a slightly higher return during an election year but not high enough to be actually statistically significant. What little difference you have there could be to chance, and it’s not a valid result to make any kind of claims about. Regardless, those numbers are fairly similar.
7:37 Ryan: So, they wanted to say, well what about volatilities? Is there a difference in US stock market volatility?
Slide 8: No Clear Relationship Between Elections and Returns
7:42 Ryan: Surprisingly, the number they calculated was actually identical. They looked at the S&P returns, and the look at the volatility of the returns, both 100 days before and 100 days after U.S. presidential elections. And, you got the exact same result. There was no difference in volatility caused by an election or not. I think that was a pretty compelling result that shows that the elections are not nearly as impactful as people tend to think.
Slide 9: Democrat or Republican Win?
8:16 Ryan: Another bit of research that came from Liz Ann Sonders of Charles Schwab. She went back to 1900 and she said, there has been several significant impacts on the market. Some of them are the global financial crisis, dot com bubble, the 1987 crash, etc. The important thing is that none of those events seem to have a strong political cause to them. Some people may debate individual ones of those. The point is that what affects the markets aren’t connected to politics.
8:57 Ryan: You can see the statistics down here showing that the U.S. stock market has performed best when a Democrat holds power in the White House, and Congress is divided. What I would say is that a general lesson is that things that impact the market have nothing to do with politics. If there’s a huge tech bubble in the late ‘90s, that’s not because Bill Clinton was in power. Those types of facts greatly overwhelm, in my opinion, whatever political effects you can try to assign to those movements.
Slide 10: Democrat or Republican Win?
9:39 Ryan: Just some more evidence from Liz Ann Sonders. Over the last 50 years and 12 election years, you had six election years that there was a “bear market” or recession. The presidential incumbent lost every time. What this is basically saying is that when things are really bad, if there is an election, the person in charge will be blamed for that bad thing and voted out. Her takeaway is that the economy impacts elections, but elections don’t impact the economy. The reverse is not true.
Slide 11: Betting on a Narrative Isn’t Easy
10:06 Ryan: Finally, I want to discuss these simple narratives that people may hear in the news and then think, maybe I should change my portfolio somehow. In this case we will limit them to political narratives. This is a quote, and I apologize as I can’t remember who to attribute it to, but I heard it several years ago. They were saying that pre-Trump’s election in 2016, he had spent a lot of time bashing Amazon on Twitter and in interviews. He had really promoted U.S. rebirth of industrial production. Based off of what he said, and then was elected, you should have basically bet against Amazon and bet on U.S. Steel (the company). You can see from the chart that this would have led you to fall based on Trump’s words.
Slide 12: Other Narratives
11:13 Ryan: Some other narratives are, and this one we hear a lot is, “A Biden win would mean higher taxes, and thus derail the economy.” I’d point out that President Clinton raised the top marginal personal income tax rate in 1993, as did President Obama in 2013. With both of these presidents, that was obviously pretty early in their terms, and they saw quite a large and lengthy stock rally after those tax raises. Not to dismiss it entirely, but Bank of America is saying that if Biden’s tax plan gets pushed through for corporate tax rates, you would see a 9% hit to after tax corporate profits. But I would also point that this rate, per his policy, is still lower than the rate that existed under President Obama. So even Biden is still trying to retain some of Trump’s corporate tax cuts with his current policy. Also, to say from a narrative point of view, that when you start talking about taxes, it gets very complex. It’s not just the top rate. It’s what can be recognized as an expense amortized, what schedule, nontaxable exchanges, etc. So, the reality of tax policy is much more complex than quoting the top rate going up or down, which makes it much harder to say “oh, Biden will raise taxes therefore some bad things will happen in the economy.” The truth is much more complex than that.
Slide 13: Other Narratives
12:53 Ryan: Another assumption I hear for a President Biden win is it’s bad for oil companies. Again, that’s possible but I would point out that Exxon Mobile supports a $40/ton carbon tax. They’ve done the calculations, and they don’t think such a tax at $40/ton would meaningfully impact their business. Sometimes you can get counterintuitive results, so it’s possible that such a tax would actually crush the coal industry, and in the short term not really harm oil. It could actually boost the natural gas demand as coal’s demand for utility and electricity generation goes way down, it gets replaced by natural gas.
13:45 Ryan: My point is don’t take these narratives and then try to place bets, so to speak, on some outcome based off of a simple narrative. Reality is always much more complex than that. Even if you don’t believe anything I just said, energy stocks are only 2% of the U.S. market right now. Materials stocks are 3%. So, if you were worried about a carbon tax affecting these companies, even if that happens, the actual effect on the overall U.S. stock market may be pretty limited. Just another reason why simple narratives shouldn’t lead to simple investment strategies.
14:26 Ryan: With that, let me turn things over to Laurent and he will cover the next few slides.
Slide 14: Pre-Election Commentary
14:32 Laurent: Great, thank you so much Ryan. I really appreciate that information. That will take us into some pre-election commentary. This is also some of the information from Liz Ann Sonders in terms of research that she and Schwab did suggesting the following. There definitely appears to be a bit of a higher chance of a Democratic sweep at the moment. By that I mean both a Democratic Congress as well as a Democratic President, with Trump’s recent COVID diagnosis and recovery. However, we are very happy that President Trump did recover and that he is back on the trail. We certainly send our regards to him and his family there.
15:19 Laurent: Certainly, there is a higher percentage chance of a contested election based on a lot of the commentary going back and forth between Democrats and Republicans. That could actually increase volatility. Even though Ryan does have some great stats about how there is not much difference volatility pre and post, I will point out that this year is quite a challenge and maybe a little bit different in this election year with the pandemic and COVID than maybe in the last four or five election years, going back 20 or 30 years. Just a point on that.
15:59 Laurent: There could be a spike in U.S. stock market volatility. Again, not necessarily based on an election year but based on the fact that we are going through some major challenges economically due to the pandemic. You’re seeing stock market volatility or the market reacting to potential legislation being discussed in terms of the stimulus package. We anticipate a little more market volatility due to that.
16:35 Laurent: As Ryan mentioned, significant legislation would require, in our opinion, a sweep by one party. Swings in sector performance based on whether you think Republicans will take the White House vs Democrats. It could be seen there. Just some pre-election commentary, news, and data that suggested these key points.
Slide 15: Post-Election Market?
16:58 Laurent: Well, what about post-election? From a post-election perspective, there appears to be some positives that we see and a few negatives. The positives we see is that there will be more certainty in terms of who will be in the White House in January. There will be more certainty in terms of who will take control of Congress. We feel like that could lessen volatility in the market. However, because of the pandemic and it being a fairly unique year, we could see volatility between now and the end of the year. Really, it could be until we see a vaccine come through and life gets back to semi-normal. Just a point to remind all of our viewers that November through April is typically good performance for the U.S. stock markets. If it was a typical year, we would maybe see a move up in the market through the end of the year. That’s known as the “January Effect” sometimes.
18:06 Laurent: A lot of fund managers are moving things around and buying so that they are ready for the new year. We do expect some sort of infrastructure spending in the form of a stimulus bill. It’s in Congress right now and going on. Whether it’s Republicans or Democrats, it’s likely some stimulus bill will get passed here shortly.
Slide 16: Post-Election Market?
18:35 Laurent: In terms of negatives, one of the big negatives is the fact that the pandemic has caused a lot of businesses to either slow down or operate at maybe 50%. Obviously, we are all dealing with it in one form or another. If you’re in one of those businesses that’s been affected, it’s obviously hitting you much harder. What’s happening is that S&P 500 earnings have gone down, and what that does is really send stock valuations up. While there’s a chance that valuations will come down, the S&P 500 earnings may increase in the hopes that a vaccine may be out sooner rather than later. Currently, U.S. stock valuations are higher relative to historic trends.
19:23 Laurent: The virus and pandemic is still a substantial threat, in our perspective, to the economy and will be over the next several years. We’ve looked at and researched anything from a couple of years all the way to maybe four or five years before things get back to normal. Unfortunately, one downside to all of this change is really bankruptcies to a lot of businesses, both small and midsized, and even some large ones as well. Bankruptcies continue to rise, and that is definitely a threat to the economy and a potential threat to the market. A couple of negatives as well potentially as we look at post-election.
Slide 17: Democrat Presidential Win
20:08 Laurent: Now, I want to come back to what Ryan had talked about with either a Biden or a President Trump win. In this case, we believe that if there is a Democrat Presidential win, per Liz Sonders and the research she did, that there will be a fiscal stimulus package, probably larger rather than smaller. There will be some type of effect on corporate and personal taxes, provided that there is agreement in Congress. Obviously, that’s important. We think that there would be more or enforced regulation. There’s been a lessening of regulations under President Trump. We think a Democratic win would increase that.
21: 59 Laurent: There’s been a lot of discussions, commentary, and headline news on the Affordable Care Act, so there’s going to be a lot of focus on healthcare, especially if the Supreme Court potentially accepts a review of the Affordable Care Act here in November. There’s a difference in foreign policy changes between the Republicans and the Democrats. That would certainly be a change if there is a Democrat win. Also, I think this is a given, but investment in clean energy and global warming under President Trump the Republicans have been fairly clear on their lack of interest in the global warming areas. Clean energy would be something that we think the Democrats would probably push a little bit more strongly than the Republicans.
Slide 18: Republican Presidential Win
21:56 Laurent: On the other hand, a Republican Presidential win would lead or have continued decreased regulation. Certainly, maintaining the tax status quo until 2025 sunset, which is when the current tax legislation is supposed to revert back to where it was. Some stimulus spending, as the Republicans want some but not nearly as much as the Democrats. Republicans tend to focus on things like the military, businesses being affected by the pandemic (a business-friendly environment), trying to help those businesses that have suffered. We have seen some executive order on immigration reform or policy changes, and that would likely continue under a Republican Presidential win.
Slide 19: Investment Strategy Options
22:49 Laurent: This next part, I’m going to invite Ryan back in. The next two slides are investment strategy options, meaning this comes from an article that Ryan had read a little while back by Howard Marks from Oaktree Capital Management. This was written with the idea that how might you change your investment strategy in a low interest environment. What it was based on was what would you do in a low interest rate environment? How would you change your investment strategy? Both Ryan and I thought that this might be appropriate leading up to the election because a lot of the options are very interesting. What I’m going to do is suggest each option, and Ryan is going to respond with his/Bell’s opinion on each of these different strategy options. Ryan, are you ready?
23:47 Ryan: I’m ready.
23:50 Laurent: Alright, so the first option that I, as an investor, is going to take is I’m going to invest as I always have and I’m going to expect those really nice historical returns of 8, 9, 10%. How is that going to work out for me in the next year or two, or say a few years?
24:08 Ryan: Unfortunately, that may be wishful thinking. If we are talking about a fixed income, we can look at current yields and know for a fact that you’re not going to get your historical yields on your fixed income because that’s just not where they are right now. If we are talking equity investments, well we don’t know that it’s unlikely. The reason is that you can look at valuation multiples, and that’s the one thing over time that has tended to correlate pretty well with forward rates of return. So, when you are starting from a position of high multiples, as we have today, it correlates pretty well to low future rates of return going forward.
24:55 Laurent: Got you. Alright, so maybe that’s not the position that I, an investor, should take. I’m going to move to option 2, or investment strategy 2. I’ve decided that I’m going to invest as I’ve always had, and maybe I’m just going to accept that in today’s environment produces lower returns. How is that going to work out for me?
25:16 Ryan: Well, as you said, you probably will get lower rates of return. If we are talking about a fixed income, that will probably work out well as long as you can accept those rates of return. Equities might work out well, with the asterisk that you may have higher volatility in the mean term while you are waiting to achieve those lower rates of return. But yes, if you can accept those lower rates of return then that’s a valid strategy.
25:48 Laurent: I see. You mentioned maybe taking some higher risks that might actually lead to more ups than downs in the portfolio. What if I decided that I don’t really want that extra risk or extra volatility, so I’m going to change my investment strategy to reduce risk. Actually, I’ve had clients call me and say, “there’s a lot of volatility and uncertainty. Perhaps we want to reduce risk in our portfolio due to those high levels of uncertainty.” How do you think that might work out for me either in the short term or the long term?
26:29 Ryan: So, that’s also a perfectly valid strategy. The challenge is that you are taking an already low likely rate of return and then reducing it even further by curtailing your risk level. Just to put some numbers on it, say you’re expecting instead of a 9% return on stocks, you would expect now a 5% now rate of return on stocks. If you cut your stock exposure in half, well now you are down to a 2.5% rate of return plus whatever you redeploy that capital to in the lower risk, lower return investment (say a money market fund). You can see how you are really cutting down your rate of return. If that’s what you want to do, that’s fine. But that rate of return may be too low to meet your financial objectives.
27:28 Laurent: Sure. Now that’s a really excellent point because when we’re running financial plans for clients, we’re telling them “hey, you probably need to get a 4% net-of-fees return or 4.5%.” Obviously if you’re looking at 3% longer term, that’s probably not going to work out for your financial plan unless you change your goals or your expected level of lifestyle.
Slide 20: Investment Strategy Options
27:56 Laurent: Alright, let’s look at a few other investment strategy options. If I’m really concerned about near term volatility, and this is something that has come to us from a client or two, not that often. But once in a while a client gives us a call and says “hey, due to that uncertainty, what do you think about the idea of going to cash and just waiting for a better environment? 3 months? 6 months? Maybe a year?” What would that look like, and what do you think are some of the challenges with that investment strategy?
28:31 Ryan: Sure. This is also called “market timing.” Historically, it has been shown to not work out very well for investors. There’s also a risk that, while you are waiting around for a better return environment, there’s no guarantee that there won’t be a lower point in the market to invest in the future. In other words, you may just see the stock market grind higher and higher over time (not very high), and you might not get a better time environment to invest in than now. There’s a risk to that even if the scenario you’re most hoping for (a collapse in the stock prices and trying to buy in low) if that does occur generally people are psychologically are really hesitate to commit capital thinking that it may go lower. A lot of people, even when they are sitting on the sidelines with cash, when the drop finally occurs. they are not able to commit their capital and jump in and take that risk. So, they miss the entire scenario that they are trying to take advantage of. They philosophically can’t do it.
29:47 Laurent: Got you. I guess currently the near zero return rate on cash, given we still have about a 2% inflation rate (maybe slightly less), is pretty much not helping your purchasing power at the moment either. That’s another arrow at that particular strategy number 4. Well, let’s jump to the other side with strategy number 5. Let’s just say that we really wanted to get that 7 or 8% in stocks. Maybe we just really ratchet our risk up higher than what we are comfortable with, in hopes that we can get to that higher return. How do you think that would work out for us in terms of over the next few years, given the environment that we’re in?
30:38 Ryan: It’s possible this can work, and certainly a lot of people have been pushed into this strategy. Being pushed out of cash and low yield investments and being incentivized to take on more risk. What I would question is, why was someone unwilling to take this much risk before? And that reason will probably lead them to sell out in the future when volatility hits. So, it could work, but it’s unlikely that clients would be able to stomach that level of volatility and stay the course with this risk level that’s higher than what they were comfortable with previously.
31:26 Laurent: Alright. That makes sense. I guess time horizon plays into it. So, if you had a very young investor in terms of a long time horizon, let’s say they’re in their thirties and just starting out, it probably does make sense to increase risk in pursuit of those higher returns. They will probably have to stay at those higher risk levels despite any ups or downs in the stock market. Let’s move to our last investment strategy option. This one is a little bit more interesting and a little bit more esoteric. Let’s say, I’ve heard of the special niches or special funds, closed end funds or special investment managers that do private equity. Very unique, specialized investments. What do you think if maybe I put some of our money into these really not very well-known or complex instruments in the hope that maybe we’d get a little bit higher return? What do you think of that idea?
32:31 Ryan: There’s a few problems with that. One is that you are almost certain to increase the expenses you pay on your investments if you pursue such a strategy. You’re almost certain to increase the illiquidity of your portfolio with such a strategy. There’s also a lot more manager risk. Once you start pursuing alternative investments that are private funds, the variation between what you may consider the type of benchmark return often goes out the window. So, you have a lot of disparity in your results. And finally, there’s a lot of money chasing these strategies. When you have the same opportunity set and suddenly more money and more interest in them, you have the same effect that you see with traditional equity and bonds where the popularity drives up the price. This lowers your future rates of return. That’s true of real estate or private equity. So, it’s not a free lunch. Let’s put it that way.
33:40 Laurent: Got it. What’s interesting is that we’ve presented six investment strategy options that clients may be thinking about as a possibility. But it sounds like after going through these six, and it’s something that we’ve talked about before, which is really homing in on your personal risk levels. Figuring out what your risk tolerance is. Maybe making sure that your financial plan supports that, and really staying the course in both ups and downs in market. Sounds like that might be the best option. Would that be a fair statement?
34:17 Ryan: I think that would be a fair statement, yes.
34:20 Laurent: Ok, great. Well, thank you. I appreciate you giving us your perspective. Obviously, it’s the Bell position. It comes from a very experienced portfolio manager with a lot of experience in market volatility and different areas of the market. Thank you for that.
Slide 21: Emergency Reserve & Markets
34:44 Laurent: We are just going to finish here with a couple of slides that we think you can take action on or think about as we head into Q4. One of those topics has to do with an emergency reserve. You might be thinking, why are they bringing up an emergency reserve heading into an election? The reason is that a cash emergency reserve does allow investors to weather short ups and downs in the market. Having three to six months of cash for your required expenses, like your mortgage, food, gas, car, internet (if you’re now working from home), etc. That can really help an individual really stay the course with their longer-term money (like retirement) because you don’t really have to think about it. Or, let’s say you’re all of a sudden out of work for a month or two, having that emergency reserve really does help you protect that longer term investments or the money that may be in stocks at that point. We do recommend if you have a two-earner household to keep three to six months of cash. Or if you have a one earner household, probably a little bit higher at six to twelve months, depending on what your required expenses are.
36:02 Laurent: Where would you put that? Would you put it in the bond market or stock market? No. You really want to put it in something very safe, like an online bank or money market account. Ally Bank is one of the ones we normally recommend. I think the current interest rate might be 0.8 or 0.9%. So, it’s under 1%, but it’s above zero. Local credit unions are okay with 0.2 or 0.3%. CD’s unfortunately are in that 0.2, 0.3% percent for a one year. And then a Schwab money market, although money market accounts have definitely come down in interest rates as well. Again, you’re not making a lot of money or a lot of return on this, but it does really help in the event of a stock market downturn or volatility.
Slide 22: Activity and Actions to Take in Q4
36:46 Laurent: The last slide we are going to talk about before Ryan comes back and gives us a nice summary is a few actions or activities to think about in Q4. Just to make you aware, if you have a taxable account and it’s currently managed by Bell, this is a typical distribution period in Q4 for mutual funds. What mutual funds are doing is they have gains in the account, and they are required to actually push those out as capital gains. In the last few years, the market has done pretty well so there have been capital gains. Unfortunately, those are treated as taxable gains in your taxable account. That’s something to be aware of. So, if you all of a sudden see a change in the price late in Q4 (November or December), a lot of times that’s basically that capital gain occurring on one day and then you get more shares the next. Please reach out to your advisor or relationship manager if that is happening.
37:46 Laurent: Roth IRA conversions. We are helping certain clients right now. If you have a lower income this year, or the pandemic did impact your income this year, this could be a year when you want to convert some of your traditional IRA money into to a Roth IRA. There are no limitations based on annual income. The caveat being that every dollar you convert now from a Roth IRA to a traditional IRA is considered a dollar of income. You really don’t want to do it if you have a higher income year, or a high tax bracket.
38:19 Laurent: And lastly, tax-loss harvesting typically occurs in a year where there has been a lot of volatility. First the market is down, and then it comes back up, and Bell did a little of this back in March or April to certain taxable accounts. We try to do that as much as we can to basically soften the tax effect in a volatile year. So, those are a few activities and actions to take in Q4. As a reminder, if you have any other questions it’s always great to give your advisor or relationship manager team a call.
Slide 23: Conclusions and Summary
38:55 Laurent: And now I’m going to pass it back over to Ryan to wrap things up.
38:59 Ryan: Great, thank you. Just as a recap, we should expect (once the election is over) a near-term reduction in political uncertainty. But as we saw in some of the previous charts, that’s not necessarily a reduction or an increase either of market volatility. It’s looking increasingly likely that we will see a Biden presidency. But for him to enact major policy changes will need full party control of Congress, as well as a way to overcome filibuster, which would probably be a repeal of the rule at the Senate rule change level. I’d also say don’t let elections influence your investing. Either A) because historically the evidence is somewhat weak, but B) because a lot of these simple narratives don’t lead to simple outcomes. It’s really not a successful way to charge your portfolio strategy.
Slide 24: Conclusions and Summary
40:06 Laurent: Yes, and then basically the coronavirus is going to continue to impact re-opening efforts and the economic recovery. And likely, it will do so for the next year and likely through 2022 and beyond. As Ryan and I talked about, staying the course with your investment risk and making really small changes is usually the best bet. Having that emergency cash reserve really does help mitigate that psychological effect as your longer term or retirement funds will go up or down.
Slide 25: Have Questions?
40:47 Laurent: So that’s the end of our webinar and the end of our slides today. I really appreciate that you joined us today. Hopefully the information was helpful for you. If you do have questions on any of the slides, Ryan or I would be happy to answer those. Contact us after the webinar, by either sending an email to your advisor or relationship manager. If you aren’t sure who that is, just send it to us at email@example.com and we will take care of you and respond.
Slide 26: Recent Webinars
41;19 Laurent: And lastly, here are some recent webinars this year. It’s been an interesting year for sure. We’ll have a few next year as well. We try to do one a quarter, or one every few months. So, three to four a year. Hopefully this information has been really helpful for you. Thank you so much.
Slide 27: Stay in Touch!
41:38 Laurent: You know how to stay in touch with us. There’s the website or our e-newsletter. Last note, today’s presentation slides will be available upon request. I want to thank you personally for listening today, and we hope you have a good rest of your week.
41:55 Ryan: Thank you.
Presented Thursday, October 22nd, 12 – 12:45 PM
Senior Investment Advisor Laurent Harrison, CFP®, and Portfolio Manager Ryan Kelley, CFA® presented our Fall 2020 Investment Committee webinar on October 22nd. Laurent and Ryan discussed:
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