Posted on 11/06/2020 6:56:57 AM PST by SeekAndFind
Dear Chuck,
How do you think a Biden presidency would impact my retirement nest egg? It is hard to know which way this election will go! I can’t afford to lose my savings.
Fearful Retiree
Dear Fearful Retiree,
Thanks for the question. As of this writing on November 4th, the day after the presidential election, there is no certain winner. In fact, it looks as if it could be an election that is settled in the courts before it is all over. So, while I will answer your question, it does not assume that Vice President Biden will in fact be elected president.
Short-Term Perspective
I wrote an article earlier this year about the possible worst-case scenario for investors: a contested election. In it, I stated that markets hate uncertainty and if we have a delayed outcome of our election, I expected the markets to tank. I was wrong.
As of right now, the markets are in fact up in the midst of enormous uncertainty regarding the ultimate outcome of the election. There are three possible explanations for this based upon a near equal split of the popular vote: (1) Investors sense that Vice President Biden will be the victor and that massive amounts of stimulus money will be forthcoming. Essentially, they are going long on government bailouts. (2) Investors sense that President Trump will emerge the victor and maintain his pro-business, pro-growth policies that will remove the lockdown restrictions hurting economic growth. (3) Investors believe a Democratic president and Republican senate will present gridlock or provide checks and balances against radical legislation.
No one truly knows which, if any of these options, is driving the optimism in the markets. We can only speculate and better understand with hindsight.
This is good news for the millions of Americans who do not want to see their investments in public stocks and bonds go into a free fall while we wait for this chaos to be sorted out. Hopefully, in the short term, your nest egg will not suffer.
Long-Term Perspective
When considering the economic impact during a full presidential term, I am in the camp of Steve Forbes. Mr. Forbes, editor-in-chief of Forbes Magazine and two-time GOP presidential candidate, predicted on September 4th that a Biden presidency would be “an unmitigated economic disaster.” His dire outlook is based upon the stated platform position to raise taxes on the rich, which will slow economic growth. Mr. Forbes predicted a return to a state of “stagflation,” which is a paradox of inflationary prices but slow or no economic growth to keep up.
A Shift Away from Capitalism
We also know that the Biden/Harris ticket has a strong expectation to implement policies of the Democratic Socialist platform. This includes the Green New Deal, the return of Obamacare taxes, and punitive policy towards the fossil fuel industry in America.
Socialism and/or communism, by definition, are economic philosophies that embrace centralized control of resources with the idea that wealth is redistributed by political leadership not based upon merit or achievement or personal rewards but based upon a government's definition of what is “fair.”
Sadly, in actual practice, governments often think it is fair to take from political adversaries or those who do not support them to give to their own constituencies or even to keep the resources for themselves. Socialist structures can become a means of coercion that provide a way to take from the producers and give to the non-producers. And usually, those whose resources are taken are first attacked, denounced, and defamed as unworthy and flawed.
The Bible is clear that we must work as unto the Lord if we are able, and with the rewards we earn, be generous toward those who are less fortunate. A socialistic structure turns that on its head. Those who work and achieve can be deemed unworthy; those who contribute nothing can be rewarded for merely being associated with those who have power.
I reached out to my friend and noted economist, Jerry Bowyer, for his help. He noted, “Christians who have fallen prey to socialist ideas tend to fall for the lie that the love of money is to be equated with free-markets. In other words, anyone who prefers free markets is deemed to be implicitly endorsing the love of money. Freedom equals greed. This is a lie, a dangerous one.”
Jerry also added this important insight:
Every system of political economy (which is what we call the study of the proper relationship between the state and the economy) involves money. Capitalist countries have money; socialist countries have money. Both systems have rich people. Both systems have poor people. The difference is that under socialism, it is the politically connected who become rich.
History is replete with examples of how this philosophy ruins economies. We can expect bigger government, more bureaucracy, more federal debt, and slower GDP growth. This will likely be bad for your nest egg long term.
Time to Be Wise
There is valid reason to believe that the fundamental pillars of our nation would be altered during a Biden/Harris term. I do not know how to invest to counteract policies and measures that are yet unknown. I do know that Solomon gave wise advice to investors who were unsure of a looming disaster. He said to diversify:
“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:2 NIV)
This is a good time to diversify your investments into asset classes that will perform well regardless of what the future holds. Professional advisors with a kingdom worldview can be beneficial in helping you to achieve this.
An analysis of investing performance also shows that holding steady in a well-diversified portfolio has greater benefits than trying to jump in and out of the market as circumstances change. The yo-yo effect of selling when the market is bad and buying when the market is good causes most investors to buy high and sell low and thus suffer losses.
If you are in your senior years and are concerned about needing funds in the near term, consider moving your retirement funds to very low-risk places like certificates of deposits (CDs), money market accounts, or even cash.
Do not live in fear and anxiety. Regardless of who becomes president, God is in control. He knows your needs and holds your future in His hands.
She will also blame the Trump legacy and conservatives. Yeah, she finds you deplorable.
When the blm types find out you voted for President Trump they will likely trash/burn your property.
That’s the short answer.
Long answer is HE!! NO.
The cash in my gun safe next to my Malinois is quite safe.
Exactly!
“Those of us who worked and have a reasonable 401k, they are coming for us.”
Friend, I dont want to imply that your 401k is in any way safe, however, I very much doubt they are “coming for your 401k”
The reason is that it is too easy for them to print money. That’s how they will steal from you; with currency debasement that is much faster than what has been happening under Trumps administration.
They will print print print, and then blame capitalism, big business, the rich, and probably white supremacy for the ensuing economic pain.
That’s how they roll on the third world. That’s how we will do it too.
No and hell no.
Yes. They will be confiscated by Treasury Secretary Elizabeth Warren and kept in a safe place.
I think our investments are safe unless democrat operatives steal Republican Thom Tillis’ U.S. Senate win in North Carolina.
If they steal Tillis’ win, they will, in turn, steal the two U.S. Senate seats in Georgia on January 5th, 2021, using the same techniques they used to steal the presidency from Donald Trump.
And that means democrats, with Commie Harris’ tie-breaking vote, will control the 50-50 U.S. Senate.
If Tillis’ win is stolen, sell.
Not only NO-—BUT HELL NO.
“That’s how they roll on the third world. That’s how we will do it too.”
That’s something to consider. Either way, they’re not going to do anything good for us. I’m glad I’m not a young wage earner.
Something else that is third world, and we’re totally ready for here: Shared misery isn’t misery at all.
As long as the shitty life is the same for people around them, liberals will say: We’re in this together.
I’m going to go vomit now.
I told my adviser to heavy-weight cash to precious metais. I was waiting for this election outcome to decide whether to retire in January or work until midsummer and add to the pot. Now, I know the answer. I won’t be risking any new money after Jan. 31.
Get out of debt as much as you can.....move if you can to a lower property tax location...keep family and friends around you...and with luck you will live through the tough times and misery that socialism and corruption brings to your front door and those you care about.
Hopefully the left cant pull this fraud off and we can buy a little more time.
“Hopefully the left cant pull this fraud off and we can buy a little more time.”
The left is unrestrained. Half the public is uninterested, and stupid, and all of the media is in the tank for leftism.
Dark days ahead.
No debt, near retirement, I’m positioned as well as I can be for an average guy.
No. We saw under Obama that the communists wanted to confiscate all 401K monies and place it into the social security fund.
The 401K is a tax law that will be abolished under communist rule.
Good luck. I hope we dont need it.
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