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The Presidential Election’s Impact

October 21, 2016 •

The upcoming Presidential election has raised many concerns amongst individuals focused on their money. As a trader, it’s only natural that you be concerned about what happens with the economy. It doesn’t matter what your personal political affiliations might be, the election has a lot riding on it, whether it be a real boost (or danger) to the economy, or just a perceived one. For that reason you need to pay attention to what the poll results are saying and how the trading public reacts to them.

Taxes are one of the biggest concerns that most citizens have in the upcoming election. Hillary Clinton’s tax proposal would raise the tax burden on some individuals, but only on those making more than $1 million per year, where the tax rate would be at least 30 percent. For those making more than $5 million per year, there would be an extra 4 percent added on top of this. It’s a big jump, but thankfully it doesn’t apply to most of us. Donald Trump also has a detailed tax plan, but would be simplifying the brackets to three: 12 percent, 25 percent, and 33 percent. Those at the highest and lowest income levels would see their burdens reduced, but only slightly.

Traders and investors have a different point of view than just themselves. There is also a large concern about the economy as a whole—typically how businesses will be impacted and how the Fed will act or not act. Historically, it’s worth noting that Republican Presidents are seen as good for business and Democratic Presidents are bad. This is not a one hundred percent accurate portrayal of things, but more of a bias. However, it’s something that impacts markets despite the bias, and therefore one that you need to be prepared to act upon, regardless of how the election plays out. Remember that Trump identifies with Ronald Reagan’s tax policies, and most Americans see this as pro-big business. Whatever the reality of this is, these types of perceptions need to be addressed within your trading. Again, it doesn’t matter what your personal beliefs are, financial decisions need to be addressed without this in mind, but rather on how trades will play out in light of the political atmosphere.

All of the above discussion leads us to a very important point: it’s very possible to take control of your own money and personal wealth regardless of what happens politically. No matter who is elected in November, there are some very important things to remember. First, your money is yours. Yes, you will need to pay taxes and you may see these go up or down at various times throughout the course of your life. Taxes are a necessary part of life, and they are a priority. But regardless of what happens on the tax front, you still have control over the majority of your money, but if you do not take steps to provide for that in your investing and trading life, you are surrendering some of that ability without need.

By learning how to actively trade, you can start to take charge of your money. One of the greatest skills that you can pick up as a trader is the ability to profit even when markets are dropping. Either through binary options trading, selling stocks short, or through Forex trading, you can gain tighter control over your ability to grow your money. It can help you to alleviate the pressure of worrying about politics and elections and prepare yourself for making a profit no matter what happens, whether it seems beneficial to you at first or not.

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