With Donald Trump’s presidential election victory, the country is watching to see what will begin the fifth year of the Trump administration. His campaign emphasized maintaining low individual and corporate taxes, more tariffs, light regulation, and continued deficit spending, priorities that could affect policy, long-term investments, and the economy. As Trump finalizes his cabinet appointments, analysts and investors are carefully reviewing his agenda for insights into proposed policies and changes we can expect.
Meanwhile, we’re actively monitoring various policy areas that could impact the economy, markets, and long-term investments to help ensure our clients are well-prepared and confident to navigate changes. Here are some of the ones we’re keeping an eye on:
- Debt Ceiling and Deficit Spending: While Trump is inheriting a relatively strong economy, debates around national debt, budget deficits, and the debt ceiling remain hot topics related to interest rates and inflation. Budget deficits occur when the government spends more than it collects in taxes, which adds to the total debt and affects economic stability. As budget planning through the reconciliation process begins in January, we will better understand the administration’s spending priorities and whether it will need more revenue to support its plans. Revenue sources include individual and corporate taxes, Social Security, and others. Still, the debt ceiling will likely continue to rise along with the deficit with new spending initiatives.
- Taxes: Although margins are narrow, with Republican control in Congress, conversations around individual and corporate tax cuts remain, which could potentially affect things like tax codes, personal income, and business investment decisions.
- Tariffs and Trade Policy: On the campaign trail, Trump discussed trade policy and using tariffs in targeted industries and regions, which could influence domestic and international markets, as well as the global supply chain. While tariffs can be inflationary, Trump has alluded to using tariffs as leveraging power with other countries.
- The Federal Reserve: While not a policy per se, we are monitoring the Fed’s January decisions around interest rates and inflation, which could affect portfolios.
What Does a Trump Administration Mean for Investors?
While policy changes can be significant, history has shown that changes within new administrations have been incremental, with their impacts on the market and economy frequently overstated, which you can read more about in a blog we shared in September. As the landscape evolves, we continue to focus on investment fundamentals with our clients, like diversification and taking a long-term perspective.
It’s our priority to keep you informed and confident in your financial strategies, and we want to provide you with peace of mind that we’re monitoring developments to ensure you’re prepared for potential impacts.
Please contact our team if you have questions or concerns or want to discuss your portfolio and investments.
CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first. How can we help you?
CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
How can we help you?
