This election cycle has been crazy. Between the pandemic, different tweets, and constant news about politics it has been really tough on everyone. Thankfully, it’s almost done! One common thought that people have during times like this is how are these changes and things you are seeing on the news going to impact me financially?
Party preference and policies aside, there are a few things that everyone should consider to get through this potentially turbulent time.
Diversify your portfolio
No matter what is going on in the world, its always good to have a diverse financial portfolio. It really speaks to my risk adverse type a brain since doing this means that you are better protected from changes in any market. There are many ways to do this, like making sure your stock investments are across various industries. But, there are some other things to consider investing in to diversify even further.
Mutual Funds: If selecting individual stocks is not your cup of tea(it’s definitely not mine) then investing in mutual funds is a great option. If you have concerns about the future, select funds that represent the market. These are good for longer term investments since eventually the market will always trend up.
Municipal Bonds: Bonds are a great investment tool. For these you invest a certain amount and get an official IOU from the company that you will get your investment back plus some interest by a certain date. Municipal bonds are low risk types of bonds since they are with the government, so you have some assurance that you will be paid out in the future.
Think Long Term
Given the turmoil of this election cycle and the state of the world right now, there is a good chance that we could see the stock market go through some changes in the next few weeks. These changes may make you nervous and think you need to take action in order to protect your investments.
However, I would encourage you to instead take a step back and think more long term. A reaction to a temporary drop or increase can have a major impact on your long term returns. So first, don’t jump to making a change. Second, I would think as though your investment money doesn’t exist so you won’t be tempted to mess with it.
Spend Less
I know, this is the easiest thing to say when there are times of uncertainty, but that’s because it’s true. You don’t control the markets but you do control what you spend your money on. So, now is a great time to look at what you are spending and your monthly budget and see if you can save some money on any unnecessary expenses.
When I am talking about spending less, I am really referring to the “wants” expenses. Can you cut back on your Starbucks purchases to 1x per week and save the difference? Now is also not the time to do any emotional shopping. I know that sometimes buying a new shirt or a random item off of amazon can feel really good, but if it’s not something you need right now it may be worth it to take some time and really think before checking out.
Just because the world is hectic doesn’t mean your world has to be hectic. This next week could be rough. There could be a lot of turmoil in the financial markets. So take some time to really think in the next few weeks before you act. And remember, you can’t control what happens in the market, but you can control how you react to it.
Also, its incredibly important to vote so please go out and make your voice heard! For more info on voting in your area click here!
