Prepare for After Election Financial Impact
After months of buildup, the presidential election is finally over. Now that the dust has settled, it's important to understand how the results might affect your portfolio, both now and down the road. Since the beginning of the year, the stock market has been in one of the longest trading ranges in history. After gaining 25% in 2003, the S&P 500 index is currently trading close to where it began in 2004. Don't let that deceive you?2004 was a volatile year.There were declines of 8% during the year in the S&P 500, 19% in the NASDAQ, 11% in the S&P 400 Midcap Index and 14% in the Russell 2000 Smallcap Index.
Even though these indexes have recovered from their losses, it's been a roller coaster ride for many investors.The stock market doesn't like uncertainty and there's been plenty this year. Much of that uncertainty centered on taxes, as Bush and Kerry had very different plans in mind. For instance, President Bush lowered the taxes on dividends and capital gains to a maximum of 15% during his first term. He made clear his desire to make these cuts permanent, which would affect companies' decisions concerning dividends. Bush also promised to make the cuts in the capital gains tax permanent, which affects the value investors and analysts place on companies and the markets as a whole.
Income tax rates affect the timing and amount of investment decisions as well. The higher the income tax rate, the greater the incentive to invest in tax-deferred retirement programs or tax-free municipal bonds. Adding to the uncertainty, Wall Street was concerned over the possibility of another disputed election like we saw in 2000. The makeup of the Congress was also important since that would affect the ability of whoever won the presidential election to implement their agenda. On November 3rd, much of this uncertainty was erased.
It became clear that President Bush won re-election. And the markets reacted by going up. I believe the markets would have gone up regardless of who won since the uncertainty was removed and investors could factor the results into their decisions.Looking ahead, President Bush has stated he intends to reform Social Security. Most believe that this will include the ability of younger workers to direct a portion of their Social Security tax into an account for which they'll make investment decisions. The more likely private Social Security accounts become, the more the stock market will go up.
When I became a broker in 1987, very few people had 401(k)s. Now almost everyone does. Much of that money is invested in the market. I believe that is one of the main reasons the markets have gone from 3000 on the Dow Jones Industrial Average to 10,000 over the last decade. It stands to reason that private Social Security accounts would have an even greater impact.The President will encourage saving for retirement by proposing Retirement Savings Accounts.
Company retirement programs may be reformed and simplified as a result. Proposed Lifetime Savings Accounts will allow after-tax money to be accessible and earnings tax-free. These too will have a dramatic impact on the stock market.On the other hand, there is concern that these proposals will increase the deficit. That'll cause interest rates to go up. When interest rates go up, bond prices go down.
The result is that bonds may return far less over the next five years then they did in the last five years.So how should you invest? For those younger saving for retirement 5-10 years from now, the stock market should allow you to grow your wealth and reach your goal sooner. For those retired it is important to divide your portfolio between cash, bonds, real estate and equities. The percentages in each will depend on your particular comfort levels and financial situation. For my clients, we had greatly decreased the amount they had allocated to equities over the last few years. Looking forward, we are now increasing those amounts.
Of course, I actively manage monies devoted to equities to make sure that a small loss doesn't turn into a devastating one. If your advisor doesn't, it will increase your potential for loss when investing in stocks. Questions? Concerns? I'd be happy to provide clear, unbiased advice free of charge.Mr. Voudrie is a Certified Financial Planner and the President of Legacy Planning Group, Inc., a Private Wealth Management firm in Johnson City, TN. For more information call 1-877-827-1463 or email e-mail protected from spam bots.Looking for an energetic expert who is passionate about financial and wealth management?
Mr.
Voudrie is an excellent speaker who will excite and inspire your audience.
Mr. Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows.
For booking information, contact Christine Lavender at (877) 827-1463 or email e-mail protected from spam bots.Related Articles can be found at www.guardingyourwealth.com under the Guarding Your Wealth Article Archive..
E-training Is Made Easy When Experts Converge For Online Webinar Focusing On Inspiring And Educating New Online Business Owners
Web Page One's popular Webinar is gaining steam with a stellar line up of business experts. Featured guests for the monthly event include Janet Legere of the Contact List Builder; Suzette Flemming of Flemming Business Services; and Stuart Mordfin, CPA of Mordfin LLP, who will discuss the state of the online business networking and financial and tax trends. Also scheduled to speak are published author Linda Alexander of i am america; IT professional Michelle Johnston Sollicito of exceptiona.com; network marketers Rebecca White and Michaele McMillan of the Perfect Image; and visionary Nancy Johnson of the Small Business Referral Network.The all-day Webinars will commence on Wednesday, March 23rd, 10:00 a.m. Eastern Standard Time. Each workshop concludes with an opportunity for guests to interact with the presenter through a question and answer period.
All participants this month receive a free copy of "Record Keeping for Non-Accountants" courtesy of Stuart Mordfin, CPA. E-books...
E-training Is Made Easy When Experts Converge For Online Webinar Focusing On Inspiring And Educating New Online Business Owners
Tax help > E-training Is Made Easy When Experts Converge For Online Webinar Focusing On Inspiring And Educating New Online Business Owners
Incorporate Church
A non-profit association is an incorporated association run with the primary purpose other than to make profit. The not-for-profit associations fall into three categories. Educational institutions and charitable associations for public benefit, trusts for the mutual benefit of the members and religious establishments like churches, religious beneficial programs and religious education. Churches are theological institutions with Jesus Christ as the head. Churches exist for the worship of God.
Other activities include proselytizing, i.e. spreading the word of God to others and other charitable works. Churches have many denominations like Catholics, Protestants, etc.
By the definition of corporation as a legal entity, churches can also be incorporated. The advantages to incorporate a church are tax exemption status under IRS code section 501(c) (3); thus, the donations and property transferal are exempted. Also, the limited liability clause protects the officers, in...
Tax help > Incorporate Church
George Hirsch Reaches New Heights in ’06 with Lifestyle TV Show
Las Vegas, NV (ContentDesk via ContentDesk Direct) January 23, 2006 -- George Hirsch's fast-paced lifestyle TV show, George Hirsch Living It Up!, is a firm go for season two in syndication releasing fall 2006. The lifestyle series is filled with helpful home solutions, savory easy to prepare recipes, world-class locations and a wide range of recreational...
George Hirsch Reaches New Heights in ’06 with Lifestyle TV Show Prepare for After Election Financial Impact tvs Tax help
Tax help > George Hirsch Reaches New Heights in ’06 with Lifestyle TV Show
Prepare for After Election Financial Impact
generators Prepare for After Election Financial Impact
Prepare for After Election Financial Impact
S&C's PureWave UPS System Manages Power Quality in College Computer Room
Franklin, WI November 5, 2003 -? Georgia College & State University, Milledgeville, GA, has selected S&C Electric Company's PureWave UPS? System to maintain consistent power quality to the computer room supporting their information technology activities. Short-duration voltage sags and power outages were adversely affecting the productivity of students using the PCs in the room and were causing problems to the air conditioning system as well. The college wanted to increase the number of PCs...
dvr Prepare for After Election Financial Impact
Tax help > S&C's PureWave UPS System Manages Power Quality in College Computer Room