Investing is, by definition, making educated guesses about the future and hoping they pay off (literally). So, there’s no way to be certain of what will happen, to what degree, and to whom. On the other hand, while there’s no certainty, there are things from the past that are pretty strong suggestions that are often right about the future. It’s only been a few days since the election, but based on the results, what are some things we can expect, and what are some things we’ve already seen?
Here are Five Fast Facts about predicting a Trump presidency’s economic moves:
- ✂️ Tax Cuts…Maybe - It is likely that the Trump administration will look to extend the tax cuts from 2017, along with changing current tax policy on tips and overtime wages to ease the tax burden on workers. Historically speaking, tax cuts prompt economic growth, so it’s easy to see why these changes should be as popular as they are beneficial!
- 💴 Tariffs - Trump has promised to raise tariffs on goods coming into the US. This is a bit controversial - on one hand, it would raise costs on the stuff coming in, thus passing those costs on to consumers. On the other hand, it would prompt American companies to bring manufacturing and production back home (more jobs!) and make American-made products less expensive. Tariffs aren’t always a guaranteed win, but if used properly, they can produce huge benefits for both businesses and workers. Here’s lookin’ at you, China.
- 📉 Cut It Down - Another Trump campaign promise is to reduce the size of government. He’s planning to tap Elon Musk to head an efficiency commission to review (and potentially remove) things that are inefficient, wasteful, and performing poorly. If history is a guide, this should be very good for the economy! And maybe we can stop paying $10,000 for a government-issued hammer.
- 📈 Yuge Bump - The markets, at least, seem to like where things are headed. The stock market soared in the two days after Trump’s election win, seeing its best day in two years. Or maybe they were just that glad for political commercials to end…
- 🙈 Ignore Politics - You’d rather have more money in your pocket (or retirement) than less, right? When it comes to investing, sound financial advice says to ignore politics and keep doing your thing no matter who occupies the White House. Value stocks have been better than growth stocks in the months following the last 11 elections, so that’s likely to be a win again now, no matter what party you belong to.
🔥Bottom line: You may or may not be happy about the outcome of the election. Either way, though, it’s wise to look at what the winner has promised and think about ways to make use of it to make your situation better. Armed with the right knowledge, you will hopefully be better off four years from now when we do this all over again!
What do you think about these predictions?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
