The Post-Election Financial Landscape

The Good News

For many investors, the outlook has changed dramatically in just a few short weeks. 

Most capitalists, entrepreneurs, and business owners appreciate the dynamics and the disruption that the Trump administration will bring to our government.

Trump aims to deregulate and cut a lot of the fat or bureaucracy out of the government. Those two things, amongst many others, bring a strong stance for the future of our country.

This positive attitude produced a bump in the overall marketplace. Right after the election, the Dow jumped 1500 points in one day. Now, it's mitigated back down again to some degree. 

Bitcoin, however, has been shooting through the roof like there's no tomorrow. Trump appears to be more bullish and deregulatory on crypto. We still don't know what that will mean, but we've had what I call the “Trump Bump.”

This positive sentiment is driving, particularly the more volatile asset classes people can invest in, the financial markets. This includes cryptocurrency. Remember, volatility cuts both ways. What goes up quickly can come down just as fast.

If we had a crystal ball, it would be easy to go all in on the asset classes that would win big in the days, months and years ahead. Unfortunately, that’s not how the world of investing works. 

“Fear of missing out” is not a winning investment strategy. In times like these, it is harder than ever to build a strategy around Buffett’s #1 rule: “Don’t Lose Principal.” 

The temptation is to grab hold of what has seen a big bump and hope that the ride continues. But beware of looking for a home run. As the saying goes… pigs get fat, hogs get slaughtered. 

You can't hold out or hope that one thing will drive your number and your wealth to your freedom point. It’s best to allocate your capital to different strategies that work together to increase your wealth while decreasing as much risk as possible.

The Bad News

While Trump has strong mandates and will do all he can, it won’t be straightforward. Even though the conservatives control the presidency, the House, and the Senate, it's still by thin margins.

There are still enough deep-state rhinos and others who can't stand Trump that will still put up roadblocks. Will he do better in 2024 than he did in 2016? Yes. He's more intelligent, experienced, and has already made moves before his swearing-in. 

Trump will do everything he can to create a better economy, but that doesn't mean it will be a straight shot or a soft landing.

The cards are stacked against Trump, even with all his vigor and determination to turn this Titanic of a great, productive, and innovative country around.

The next few years will be bumpy and volatile. There is no “set it and forget it,” whether it's your business operations or your investing.

The Truth about Wealth and Success

There will be opportunities, but only in the tailwinds of volatility. Headwinds are here in different areas of the economy and markets. Understanding how to hedge against them will be half the answer to protecting and creating wealth.

It is never just one thing that will protect your wealth or create massive wealth for you. Most like to believe that just getting into “real estate, ” buying gold, or investing in one asset will make the difference.

It won’t. That’s not reality. While the past models of the last 40 years might’ve worked to some extent, they will no longer produce the results you’re looking for. We must seek to mitigate the downsides in our businesses and investing.

No matter what we do, there will be downsides. There will be pain. You can weather through it and mitigate a lot of it. But no perfect model, no matter who's driving the ship, will take you through this period without some pain. 

You can’t face 36 trillion dollars a year in debt and over a hundred trillion dollars in unfunded liabilities (reaching two trillion dollars a year) and attempt to turn that around without some pain. 

The Inevitable Pain of a Recession

Trump is willing to put us through some pain in different market sectors to change the direction of our Titanic before crashing into its inevitable iceberg.

He won’t allow the Fed and Congress to keep doling out money hand over fist or allow the Fed to lower interest rates (quantitative easing) and buy more bonds and commercial paper.

That means the belt will be tightened. The markets will draw down, and the exuberance will evaporate.

This is why you must learn to allocate your capital across the spectrum of viable, less risky investments based on where you are in your life and career.

If you still have active income for some period of time, that gives you some flexibility in risk tolerance.

If you’re near the end of your career, selling your business, or taking some chips off the table…

You don’t have the luxury of taking any more risk than necessary. You must be more prudent. The question is, How are you going to do that?

Will you allow a financial advisor or a 401(k) administrator to be the captain of your future? What have they been studying or keeping track of? Where is their incentive to protect you before themselves?

Most financial advisors or 401(k) administrators’ incentive is to keep assets under management at all costs. That’s how they get paid. They don't have any skin in the game (your actual investments). It doesn’t matter whether your portfolio does well or not. They still get paid.

Opportunity Lies with the Educated and Well-Connected

The opportunity lies in the necessity and ability to drive your own financial future. Don’t depend on the “Trump Bump” and think, “Ah, it’s all good.”

We can’t assume that everything will return to a nostalgic sense of normal. We must step up and investigate what strategies are viable and profitable today and in the years ahead.

We have some relief for the country now, but it will be short-lived. Pretty soon, it will get bumpy, and you don't want to be caught in that downslide. 

This is what I love to do in Freedom Founders. We have access to some of the best curated, vetted opportunities that people can find. This requires a mindset shift to take advantage of the opportunities and steer your own ship.

The Freedom Founders Community is a place where iron sharpens iron. If you've never been a part of a group like this, you deserve an opportunity to test-drive it. It can be life-changing for those ready to make the necessary changes in their life. 

Click here to schedule your call with my team and learn if the Freedom Founders community would be a good fit for you.