Trump’s Impact on Your Portfolio, Taxes and Crypto

Understanding how policy changes could impact your financial plan is crucial for long-term investors, though it's important to remember that markets are influenced by many factors beyond politics. (e.g. technological advancement, globalization) The key is to understand that while policy changes can create short-term market reactions, long-term investment success typically depends more on broader economic factors and proper portfolio construction.

Here are some key points to consider:

• The Trump administration plans to extend the Tax Cuts and Jobs Act beyond 2025, maintaining the 21% corporate tax rate and current individual tax rates, which provides clarity on the tax environment.

• The market responded positively to the 2024 election results, with the S&P 500 rising 2.5% the day after, partly due to reduced uncertainty and enthusiasm for proposed policies.

• Treasury Secretary nominee Scott Bessent has outlined an ambitious "3-3-3 plan" focusing on deficit reduction, GDP growth, and energy production.

• While tax policy changes, such as the potential extension of the Tax Cuts and Jobs Act beyond 2025, can affect corporate earnings and individual tax rates, these effects tend to be less impactful than broader economic trends.

• A well-diversified asset allocation strategy that includes a mix of stocks, bonds, and other asset classes has historically been the most effective approach for navigating various policy environments.

Remember that successful long-term investing is more about maintaining a disciplined, diversified approach through various policy environments rather than trying to adjust your portfolio based on specific policy changes.

What is happening with cryptocurrency and President Trump?

Here are some key points to consider about cryptocurrency and a second term under President Trump:

• Bitcoin has seen significant price movements following the 2024 election, reaching new highs above $100,000 in response to crypto-friendly policy proposals, including the naming of a “crypto czar.”

• However, cryptocurrencies have historically shown extreme volatility, with price swings 5-10 times greater than the stock market.

• Previous crypto market cycles have demonstrated both dramatic rises and severe declines, like Bitcoin's 80% drop after its 2017-2018 rally.

The most prudent approach is to view any cryptocurrency exposure in the context of your overall financial goals and risk tolerance, rather than making investment decisions based on short-term political developments.