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A Different Degree of Wealth

Elections and Economic Shifts: Don’t Worry be Optimistic

As a financial advisor no matter what happens next week, understanding the intricate relationship between elections and economic dynamics is helpful for effectively guiding clients through periods of uncertainty. While elections often introduce volatility and unpredictability, they also present unique opportunities for potential economic enhancement. This newsletter will explore the historical context of elections and economic shifts, examine the factors that may lead to positive changes in the economy, and highlight the challenges that investors may face during these times.

Historical Context of Economic Transformations

Historically, elections have acted as catalysts for significant economic transformations. For instance, the election of 1948 occurred in the wake of World War II, a time when the U.S. economy was transitioning from wartime production to peacetime consumption. The policies implemented during this period spurred economic growth driven by increased consumer spending and industrial expansion. The post-war era witnessed a booming economy, characterized by rising incomes and a flourishing middle class.

Another notable example occurred during 1993 to 2001. This period was marked by a combination of fiscal discipline, trade agreements, and technological advancements that collectively contributed to low unemployment rates and a budget surplus. The North American Free Trade Agreement (NAFTA), enacted in 1994, facilitated trade between the U.S., Canada, and Mexico, fostering economic growth and job creation. During this time, the tech boom also played a crucial role, as advancements in technology drove productivity and innovation.

The response to the 2008 financial crisis is where new policies were implemented to support economic recovery. The American Recovery and Reinvestment Act of 2009 aimed to stimulate the economy through infrastructure investments, tax cuts, and social welfare programs. These measures contributed to gradual economic recovery and stabilization, demonstrating that effective policy interventions can have lasting positive impacts.

More recently, during 2017 to 2021, the U.S. economy experienced notable shifts driven by a blend of tax reforms, deregulation, and trade policy changes. One of the administration’s hallmark achievements was the Tax Cuts and Jobs Act of 2017, which aimed to stimulate economic growth through reduced corporate and individual tax rates. The economy saw robust growth and low unemployment in the years that followed, with significant stock market gains as well. However, trade tensions, particularly with China, introduced volatility and affected sectors reliant on global supply chains. By 2020, the onset of the COVID-19 pandemic created unprecedented economic challenges, leading to swift government intervention through stimulus measures to support businesses and households.

Factors Indicating Potential Economic Shifts

Several factors suggest that upcoming elections may yield positive economic shifts, providing reasons for cautious optimism:

Policy Innovation: Elections often bring forth new ideas aimed at addressing pressing economic challenges. Candidates may propose substantial investments in infrastructure, healthcare, and education, as well as initiatives focused on renewable energy. These proposals could potentially drive job creation and stimulate economic activity in various sectors. For instance, an emphasis on green technology and infrastructure repair could result in increased demand for skilled labor, thereby reducing unemployment rates and enhancing economic growth.
Consumer Confidence: The perception of stability following elections can enhance consumer sentiment, potentially leading to increased spending. When consumers feel optimistic about the economy and their financial prospects, they tend to engage in significant purchases, such as homes and automobiles. This uptick in consumer spending may further stimulate growth in sectors reliant on discretionary spending, such as retail and housing. Historical data indicates that consumer confidence often rises following elections, especially when the outcome aligns with market expectations.
Market Reactions: Financial markets typically respond to the anticipated effects of elections on economic policies. If an elected candidate is perceived as pro-business and supportive of free-market principles, markets may react positively. This could encourage investment and contribute to stock market growth. Conversely, uncertainty surrounding policies or candidates may lead to market volatility and investor caution. Investors often analyze the potential economic implications of elected officials’ platforms, which can influence market sentiment in the lead-up to and following elections.
Investment in Human Capital: Elections frequently emphasize education and workforce development policies. A focus on improving education and training can cultivate a more skilled workforce, which is essential for long-term economic growth. An enhanced workforce may help maintain a country’s competitive edge globally by adapting to technological advancements. Candidates proposing investments in vocational training, higher education, and lifelong learning initiatives may positively impact labor market conditions, leading to reduced unemployment and improved economic output.

In addition to these factors, external influences such as shifts in global trade policies, technological advancements, and climate-related initiatives could significantly shape the economic landscape following elections. The rise of green energy and digital transformation may spur substantial growth in sectors such as clean energy and technology, providing further reasons for optimism. As nations increasingly prioritize sustainability and innovation, the potential for economic expansion in these areas becomes more pronounced.

Challenges and Considerations for Investors

While there are several reasons for optimism regarding the potential economic impacts of upcoming elections, challenges and risks remain. Political polarization has become a prominent feature of contemporary politics, which may lead to legislative gridlock and hinder economic progress. Disagreements between parties on key issues can stall important reforms and initiatives that may be necessary for addressing economic challenges.

Moreover, global economic conditions and inflation pose ongoing risks to growth. The interconnectedness of the global economy means that domestic policies can be affected by international developments. For example, trade tensions, fluctuations in commodity prices, and changes in foreign investment can all influence the U.S. economy. Additionally, inflationary pressures, exacerbated by supply chain disruptions or rising energy costs, may limit consumer spending and dampen economic growth prospects.

Investors must also consider the potential for market volatility during election seasons. Historical trends indicate that stock markets often experience increased fluctuations leading up to elections as uncertainty rises. While some sectors may benefit from positive policy changes, others could suffer from shifts in regulatory environments or changes in consumer sentiment. As such, maintaining a diversified investment portfolio and employing risk management strategies are essential for navigating these turbulent times.

Conclusion

Navigating the uncertainties surrounding elections and their potential economic ramifications requires careful analysis and a proactive approach. By recognizing historical trends and anticipating potential policy changes, investors may better position themselves for growth in the post-election landscape. Staying informed, patient, and focused on long-term strategies is essential for weathering any economic shifts that may arise.

Ultimately, a proactive and informed approach may help investors adapt to changes with confidence and resilience. If you have any questions or would like to discuss how these factors may impact your investment strategy, please do not hesitate to reach out. For additional insights, consider reading “Wealth on Purpose” by Bryan Ballentine, which provides a deeper understanding of financial strategies in a changing economic environment.

Sources: Located at the bottom of article

Golf Tip of the Week:

If you fight a slice, you’re probably making this simple setup mistake

One of the fundamentals of driving is a forward ball position, generally in line with the inside of your front heel. But be warned, especially you slicers out there, that the more forward the ball, the higher the risk that you set up open to your target line. For a slicer, that can be the opposite of what you want.

Most slicers aim left in an attempt to start the ball left and make room for their left-to-right curve. Couple that with a forward ball position, which can pull the chest more to the left, and it’s not an exaggeration to see the shoulders as much as 20 degrees open to the target (above).

Why is that bad? Because if the shoulders are way left, the club is usually going to swing way left. That combination of an out-to-in path and an open clubface only makes a slice worse.

Here’s how to play the ball forward and also properly align your shoulders. Set up as you normally would, but before pulling the trigger, turn your chest to the right so that your shoulders feel like they’re closed to the target. Viewed from behind, you would see the very top of your left forearm (above). It should also feel like your chest is looking behind the ball.

From this position, you’ll be able to keep your shoulders closed longer on the downswing and hit the ball from the inside—the best way to get rid of that slice.

Golf Tip adapted from golfdigest.comⁱ

Recipe Tip of the Week:

Classic Chicken Pot Pie

Ingredients

1 cup diced onion

1 cup diced celery

1 cup diced carrot

1/2 stick butter

1 clove garlic, crushed

1/2 cup all-purpose flour

1 cup chicken broth

1 1/2 cups half-and-half

1/2 teaspoon sea salt

1/3 teaspoon sage

1/4 teaspoon ground black pepper

1/8 teaspoon ground allspice

1/8 teaspoon ground nutmeg

Pinch dry mustard

Pinch cayenne pepper

1 pound cooked chicken breast, cubed

1/4 cup sweet peas

Store-bought puff pastry sheets, for topping

Directions

Preheat the oven to 425 degrees F.
In a heavy-duty pot, cook the onion, celery and carrot with the butter on medium to high heat until the vegetables are soft. Add the garlic and cook until fragrant (be careful not to burn). Stir in the flour and cook until a paste forms. Reduce to low heat and add the chicken broth, half-and-half, sea salt, sage, pepper, allspice, nutmeg, dry mustard and cayenne. Cook until thickened, periodically stirring. Remove from the heat and add the chicken and peas. (Pot pie filling can be made the day before and chilled, or day-of if using right away.) Portion the pot pie filling into 4 small oven-safe crocks or baking dishes, with at least 1 cup filling per dish. Cut the puff pastry sheets according to the sizes of the baking dishes, enough to cover the top.
Bake until the puff pastry is golden brown and has risen, 15 to 20 minutes. Serve immediately.

Recipe Tip adapted from foodnetwork.comⁱⁱ

Travel Tip of the Week:

The One Suitcase Hack That Will Keep Your Clothes Wrinkle-free, According to a Professional Packer

Delayed planes, lost luggage, misplaced passports, long security lines, wrinkled clothing. These are the not-so-glamorous parts of travel that rarely end up on your Instagram feed. While it’s hard to circumvent most of these unfortunate instances, there is a secret to at least avoid one of these inconveniences: wrinkled outfits.

Let’s face it. No one wants to be stuck ironing on vacation. Sure, you could make a case for bringing a travel steamer along for the ride, but that just takes up precious suitcase space. Don’t worry. You don’t need either. It all comes down to the proper way to pack your bags. And we promise it’s one of the simplest hacks to follow.

You know the large plastic bags you come home with from the dry cleaner? Instead of stuffing them in your trash or recycling can, save them. When packing for your next adventure, put your more delicate items inside the dry cleaning bags, including your cotton and linen pieces. Don’t worry about fabrics like silk, wool, denim, and cashmere, as they are less likely to wrinkle.

You’ll fold each piece of clothing as usual and place it inside a separate bag before placing it in your suitcase or duffel bag. This tactic works because the bags will slide against each other, meaning your cotton t-shirts and breezy linen pants won’t get stuck and inevitably cause deep creases and messy wrinkles while in transit.

No dry cleaning bags? No sweat. Trash bags or liners work too — just make sure they aren’t scented. You want to avoid a suitcase that smells like fresh pine or lemon zest.

Unfortunately, this travel secret isn’t fool-proof (a few wrinkles may pop up), but it will reduce the number and severity of creases.

What if you don’t have any plastic to spare? Layering your clothes with tissue paper can be helpful, too. Loosely rolling your delicate clothes is also preferable to folding; just place them on the top or outer portions of your bag, where there will be less pressure.

One final anti-wrinkle packing tip for those travelers who tend to procrastinate: Unpack as soon as you arrive. Yes, it’s tempting to drop your suitcase off and head straight to the hotel pool, but you’ll spend more time getting rid of those wrinkles later on. Take five minutes, hang up your most delicate clothes, and then enjoy a wrinkle-free vacation.

Travel Tip adapted from travelandleisure.comⁱⁱⁱ

Our mailing address is:

Ballentine Capital Advisors
15 Halton Green Way
Greenville, SC 29607

Sources:

Disclosure:

Ballentine Capital Advisors is a registered investment adviser. The advisory services of Ballentine Capital Advisors are not made available in any jurisdiction in which Ballentine Capital Advisors is not registered or is otherwise exempt from registration.

Please review Ballentine Capital Advisors Disclosure Brochure for a complete explanation of fees. Investing involves risks. Investments are not guaranteed and may lose value.

This material is prepared by Ballentine Capital Advisors for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.

No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.

Advisory services through Ballentine Capital Advisors, Inc.

ⁱhttps://www.golfdigest.com/story/close-off-your-setup-for-longer-drives

ⁱⁱhttps://www.foodnetwork.com/recipes/classic-chicken-pot-pie-12724288

ⁱⁱⁱhttps://www.travelandleisure.com/how-to-avoid-wrinkles-when-packing-8656158