Mariner Wealth Advisors Managing Director Jana Shoulders is telling her clients to remain calm amid uncertainty surrounding the impending U.S. presidential election.
Don’t try to “be heroic” or make any “knee-jerk decisions,” Shoulders told Yahoo Finance in an interview. She’s advising clients to maintain their focus on the long term and not let fear of the election outcome drive their asset allocations. “A lot of people are somewhat paralyzed. What we try to do is focus back on the fundamentals,” she said. Even in the case of a Democratic sweep in government, Shoulders calls back on history to make her case. “Historically, the S&P 500 performance from ‘33 to 2019 would tell us, that still is a 9% average annual return.”
Regardless of who wins the 2020 election, though, many business leaders and investors alike believe that taxes are going to go up, according to a recent survey by PricewaterhouseCoopers. Shoulders supports these beliefs as well. “We are going to need to pay for what we’re creating in the form of debt,” she said.
For those concerned about an increase in taxes, there are steps to take to protect portfolios, which Shoulders explains in two parts. “There’s the income tax aspect of it. If taxes are going up, does that mean you want to go ahead and recognize some income this year?” asked Shoulders.
Additionally, there is the impact from the estate tax perspective, which has an existing exemption of $11.58 million. “Maybe we want to use some of that. Let’s take advantage of it, instead of saving it, or taking a chance that we could have change next year, which could be retroactive,” she says. “We know now that that’s a risk.”
Jennifer Shanker is a producer for Yahoo Finance.