How should we allocate our investments if we are close to or in retirement with a populist president in office? It is easy for those who feel empowered by the movement to be overly optimistic, while those who oppose it may lean too pessimistic. The United States has had only three populist presidents in its history, with one currently in office, meaning there is limited historical data to analyze—less than 20 years out of our 250-year history.
Given this uncertainty, how should investors approach their portfolios? Rather than reacting to political cycles, it is more effective to focus on three key components of investing that apply in any economic environment:
Emotions – How investor sentiment impacts decision-making.
Personal Impact – How policy changes may affect individual financial situations.
Big-Picture Perspective – The long-term outlook beyond any one presidency.
By applying these principles and following the core PlanAssist® philosophy—having a plan, staying diversified, and seeking counsel before making big financial decisions—investors can navigate uncertain times with greater confidence and discipline.
Managing Emotions in Investing
Emotions are often an investor’s worst enemy. When making difficult decisions in the middle of emotional turmoil, we are more likely to make the wrong choice. This is why it’s important to recognize when emotions are playing a larger role than usual in financial decisions. While emotions will always influence decision-making, we can usually tell when a choice is being driven more by fear, personal beliefs, or overconfidence rather than by sound financial reasoning.
A populist president often brings significant change, which leads to heightened political and economic volatility. This, in turn, can cause extreme reactions from investors:
PlanAssist® Takeaway:
The best way to avoid these extremes is to have a plan, stay diversified, and seek counsel before making major financial decisions. While this advice is simple in theory, it is much harder to follow in the moment—especially if you haven’t prepared in advance. This is why long-term discipline and a well-structured investment approach are critical.
Assessing the Personal Impact
There is a common saying among economists about the difference between a recession and a depression:
"A recession means your neighbor is out of a job; a depression means you are out of a job."
I mention this because we should avoid making financial decisions based on our neighbor’s situation. During politically charged times, it becomes even easier to be influenced by the emotions and experiences of those around us. Instead of making investment decisions based on our own financial reality, we may be swayed by what we hear in the news or the challenges our friends are facing.
How close you are to economic turmoil—whether positive or negative—will naturally influence your perspective. In some cases, personal circumstances may warrant adjustments. However, if your investments are already aligned with your risk tolerance, time horizon, and a diversified strategy, then making drastic changes may not be necessary.
PlanAssist® Takeaway:
Your investment strategy should be based on your unique financial situation, not the experiences of others. Political changes may impact taxes, inflation, and market volatility, but a well-structured financial plan accounts for these shifts over time. If your portfolio is built with a disciplined, long-term approach, you won’t need to react emotionally to short-term events.
Big-Picture Perspective
Bill Gates once said,
"We tend to overestimate what we can accomplish in a year but underestimate what we can achieve in ten years."
This quote is especially relevant in times of political uncertainty. When emotions run high, it is easy to focus too much on short-term changes and lose sight of the bigger picture. Instead of reacting to political shifts or economic volatility, investors should take a long-term view of their investments and financial strategies.
PlanAssist® Takeaway:
A well-structured, long-term investment plan should not be dictated by political cycles. While elections and policy shifts may bring short-term disruptions, history has shown that markets reward patient, disciplined investors. The key is to focus on long-term goals rather than short-term fears or excitement.
Final Thoughts & Next Steps
Navigating investment decisions during a populist presidency—or any period of political uncertainty—requires discipline, perspective, and preparation. While emotions and external influences can create pressure to make abrupt changes, successful investors focus on long-term principles rather than short-term reactions.
By following PlanAssist® principles—having a plan, staying diversified, and seeking counsel before making big financial decisions—investors can maintain financial stability regardless of political cycles.
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DISCLOSURE - All written content on this article is for information purposes only. We utilized ChatGPT and other sources for this article. Opinions expressed herein are solely those of Core Wealth Consultants. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. Core Wealth Consultants, LLC a Registered Investment Advisor in the States of Florida, Indiana and Michigan. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Diversification and asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss.
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