I’m an Economist: 10 Ways Trump vs. Biden Won’t Impact Your Money
This fall, the presidential election will be front and center in most Americans’ minds. The final outcome will determine whether current President Joe Biden stays in office or if former President Donald Trump comes back into office. Either way, the citizens electing the next commander in chief should not worry too much about what the outcome will be for their wallets.
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“While elections can bring uncertainty, many economic factors remain stable regardless of who is in the White House,” said Ryan Jacobs, the founder and managing partner of Jacobs Investment Management. “By understanding these constants and focusing on long-term strategies, Americans can navigate the political landscape with confidence and continue to build a secure financial future.”
Jacobs weighed in from an economist’s point of view on 10 ways that Trump versus Biden will not impact your money.
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Long-Term Investment Trends
Investment trends that are considered long term hold up remarkably well against political changes, shifts in leadership and changing of parties. While the stock market might feel a few bumps during an election cycle, the broader economy does not. That’s because it’s fueled by a number of different global economic factors, shifts in demographics and advancements in tech.
“Investors should focus on long-term goals rather than short-term political noise,” Jacobs noted. “Over decades, the market has shown a robust ability to grow, irrespective of the party in power.”
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Federal Reserve Policies
Operating independently of the executive branch and the president, the Federal Reserve calculates actions and bases choices not on agendas aligned with politics, but hard numbers from economic data. Mostly, the Fed oversees monetary policy and interest rates and can turn the dial up or down on inflation, all with the intended goal of stabling costs for consumers, as well as pushing unemployment as low as possible.
“The Federal Reserve’s role in managing the economy through monetary policy remains a constant, providing a stabilizing influence regardless of election outcomes,” said Jacobs.
Social Security and Medicare
Two national programs that provide necessary benefits to millions of Americans — many of whom are very active at the polls — are Medicare and Social Security. The infrastructures and main values behind these institutions remain intact through the changing of the guard by way of political parties, administrations and presidencies. While they might be subject to reform, and constantly are, they remain tent poles within the American economy.
“These programs have broad bipartisan support, making drastic changes unlikely without significant legislative action,” Jacobs explained.
Employment Trends
Who has a job and why they have a job in the United States largely depends on what is happening in economies around the world, rather than who is in the White House. Coupled with advanced upgrades in tech, industries like healthcare and green energy are consistently growing. These sectors, combined with the job market as a whole, continue to offer employment opportunities to voters while stimulating the national economy.
Jacobs made sure to highlight that “job growth in these key sectors is fueled by innovation and demand, factors that transcend political changes.”
Consumer Spending Habits
Personal income plus savings rates combined with the confidence of the American consumer is the math that adds up to the push behind the U.S. economy, according to Jacobs.
“While policies may tweak the specifics, overall spending habits remain relatively steady, driven by broader economic conditions,” he pointed out. “People’s day-to-day spending decisions are more closely tied to their personal financial situations than to who’s in the White House.”
Corporate Earnings
“Corporate performance hinges on business fundamentals and market conditions, which are only marginally affected by election outcomes,” Jacobs said.
That’s because the earnings of a company depend largely on global markets. They are frequently impacted by things like technological leaps and the rise and fall of consumers’ demand for a product or service. Political climates change and companies adapt as necessary. Meeting market needs and innovating with the evolving times are part of doing business.
Real Estate Market
Interest rates, regional economies and supply and demand shifts are what make the real estate market fluctuate, much more than presidencies. It’s true that the market can be impacted by national policies, depending on the scope and nature of the conditions within it, yet housing issues tend to change with economic trends that are broader in nature.
“Real estate continues to be a solid investment, driven by demographic trends and interest rates rather than short-term political changes,” Jacobs stated.
Technological Advancements
Connected to a few of the other ways a Trump versus Biden presidency won’t financially hurt most Americans: technology and the advancement of it. Jacob called tech one of the “relentless forces shaping the economy” due to the sector’s innovations that are being made with increasing speeds.
“Industries like artificial intelligence, biotechnology and renewable energy continue to evolve, creating opportunities and driving growth independent of political leadership,” Jacobs said. “Technology is a key driver of economic growth, and its trajectory remains largely unaffected by political changes.”
Global Economic Integration
“Global economic trends and partnerships are crucial factors that transcend political boundaries,” Jacobs said. “The global economy is interconnected, with trade, investment and supply chains spanning multiple countries.”
The domestic economy in the United States tends to be influenced by trends in globalization and economic integration. Fluctuation can occur when there is a change in the presidency on issues such as trade, but on the whole, it tends to be minor in terms of the larger economic picture.
Personal Financial Planning
Ultimately, personal financial planning — budgeting, saving, investing and managing debt — remains a constant need for individuals, in Jacobs’ personal experience and opinion.
“Regardless of political changes, the principles of sound financial management endure,” Jacobs advised American voters. “Focusing on personal financial goals and strategies is essential for long-term financial health, irrespective of the political climate.”
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This article originally appeared on GOBankingRates.com: I’m an Economist: 10 Ways Trump vs. Biden Won’t Impact Your Money