For most people, I think it’s fair to say that last week’s Presidential election was a shocker. Regardless of who you voted for, if you followed the vast majority of the national polls it seemed as if a Trump win was a LONG-SHOT. And that’s putting it mildly. But, here we are.
As I watched the election results roll in, I also kept tabs on the Dow Jones Futures market which dropped precipitously throughout the night. This had many of the news pundits running around like their hair was on fire. I was thankful the stock markets were not actually open during the election because by the time the opening bell rang, what looked like a bloodbath ended up being a flat open.
The Dow Jones proceeded to post huge gains, and has been on an upward trajectory ever since. There are many disappointed stock market prognosticators throughout the country right now.
I’m not here to debate or engage in the benefits of one candidate over another – that’s simply not what we do. But here are a few positive thoughts on what may lie ahead, particularly from a tax standpoint.
The Republicans kept the House, the Senate, and won the White House. There is a good chance this will eventually lead to comprehensive tax reform. We have some of the highest corporate tax rates in the developed world, and it’s no secret that President-elect Trump wants to cut those rates from 35% to maybe 20%.
This would be a significant reduction in taxes that will flow to the bottom line of company profits, which should be good for stocks in the long-term.
Included in this tax reform may be the repatriation of corporate profits currently held overseas. These profits are estimated to run into the Trillions. This could spur additional domestic investment and growth if those funds are brought back to the U.S.
The Republicans will also probably be inclined to ease the regulations on banks, which in turn could promote lending to small businesses, enabling them to hire and expand.
All we can do as citizens is go out and vote for our candidate, and hope he/she wins. The rest is out of our control, so let’s just focus on what we can control and stick to the long-term game plan. Our financial goals and objectives have not changed based on the outcome of an election.
I’ll admit I’m an optimist, and I always believe the long-term prospects for the United States of America are bright.