Today voters in Georgia take on the task of deciding control of the U.S. Senate by casting votes for two runoff elections in the state.
The outcome of these elections could have implications for your wealth, so let’s take a look at the potential outcomes.
Republicans maintain a majority in the Senate. This means that President-elect Biden will likely have a harder time passing major new legislation or reversing legislation passed under the Trump Administration.
Even in this scenario, Republicans maintain a small majority. Same implications as above.
The Senate will be split 50/50, and Vice President-elect Kamala Harris will hold the tie-breaking vote on any legislation. Essentially, this opens the door for President-elect Biden to pass major new legislation and/or reverse legislation that was passed under the Trump administration.
The Presidential election in early November proved that trying to predict the outcome is a waste of time. Just like the November 4th contest, the Georgia races are already breaking records for early voting, party spending and overall turnout.
And, just like the Presidential race, there are warnings that we may not learn the outcome of these two contests for days.
Over the long-term, it probably doesn’t have much of an impact. But over the short-term, serious investors will benefit from remembering that:
Markets despise uncertainty. If we don’t see an outcome immediately, we could see volatility. Likewise, if Senate control shifts, we could see volatility. Remember that volatility often represents opportunity. If volatility ticks up but nothing else about your personal situation changes, stay true to your long-term financial plan.
Any changes to legislation that impact your financial plan will come well after the results are tallied. You’ll have ample time to plan for potential changes to income or estate taxes. Subscribe to our blog to stay up-to-date on any legislative changes that require unique planning strategies.
Regardless of who wins, this will be one more distraction out of the way of the pending global economic recovery. We have been saying that the next logical step in this market recovery, if it is sustainable, is broader participation across market caps, styles, sectors and geographies. We saw this trend emerge in the final months before the end of 2020, and we believe it will continue as the recovery progresses. Globally diversified portfolios stand to benefit.
With 25 years of experience, we’ve seen it all. Bull and bear markets, Democrat and Republican agendas, and transitions of power. We’re experienced in the art of keeping clients focused on the long-term, while taking advantage of short-term opportunities. If you are a serious investor looking for a long-term partner to help you build your wealth, learn about how to take us for a test-drive, and then Let’s Talk.
Kristin Castner, CFA
At Heritage Kristin is responsible for overall marketing strategy, with a focus on communicating the firm's message to clients and prospects and creating outreach programs to engage clients, partners and prospective clients.