By Jason LaBarge, Financial Advisor and President of LaBarge Financial
Between an assassination attempt on a former president, the current president announcing he won’t pursue a second term and stock market volatility, there’s a high level of economic uncertainty in the air. A recent survey revealed that over 40% of Americans are experiencing feelings of anxiety and depression around the election. On top of that, people are also stressed about their personal finances. Regardless of who’s elected, headwinds such as inflation, high cost of living and elevated interest rates will continue hovering over our nation’s economy. That’s why the key to maintaining healthy finances is focusing on what’s within your control.
Hold Fast to Your Long-term Financial Plan
Nerve-wracking news will continue to swirl, but getting caught up in fear won’t do anything to serve you. I remind people all the time not to let emotions drive their financial decisions. Don’t get hung up on what’s happening on a national scale – focus on what’s happening within your own household. While you can’t control inflation or stop the cost of living from rising, you can control how much you’re spending. Carefully analyze your monthly budget and figure out where you can cut back on spending. If you’re carrying debt, create a plan to pay it down. Review your savings accounts to make sure you’re setting aside enough money for emergency expenses and long-term goals such as buying a home, purchasing a new car or going on a dream vacation. Work with a financial professional to make sure you have a solid financial plan that addresses tax strategy, estate planning, healthcare coverage and saving for retirement.
Understand Market Cycles
Remember that it’s normal for markets to go through cycles, and the stock market can rebound just as quickly as it can crash. Market corrections do occur which can seem alarming, but they are a natural part of economic cycles. As an investor, you might be wondering what you’re supposed to do, and the first thing I always tell people is not to panic. Rather than stress over the situation, stay focused on putting yourself in a position to take advantage of upward swings when they recover because it’s not a matter of if recovery will occur, but a matter of when. Wall Street suffered its worst day in years on Monday, August 5, but just a week later, rebounded to see one of its best days of the year. While fluctuations in the stock market can cause your investment balances to fall, they can also present opportunities. There are a variety of moves you might consider such as Roth conversions and tax-loss harvesting. But it all depends on your unique situation, which is why it’s crucial to meet with a financial advisor who can help you determine what moves are best for you. My biggest priority when I work with people is providing them assurance that their hard-earned money will be properly managed and invested. When I’m giving them investment advice or crafting a financial plan, I center everything around their ideal interests.
Lean into the Power of Education
Things will only feel more intense as we get closer to November, but don’t let politics stress you out. Let go of your anxiety around the election because it’s out of your control. Instead, spend time researching policies because it’s the policies that will have more of an impact on the economy than the candidates. Don’t get sucked in by scary headlines, but don’t completely ignore them either. Find a healthy balance of staying up-to-date on current events while also allowing yourself to focus on your own life. There has never been a time in history where there wasn’t uncertainty, and there never will be. Embrace this reality and tap into all of the resources and support systems around you to keep yourself healthy – physically, emotionally and financially.
Risk Disclosure: Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. MAS and LaBarge Financial are not affiliated entities. 02564886 – 08/24
‘Election anxiety’ is spiking. And there’s still 4 months to go. (usatoday.com)