Panic or Prosperity?

Panic or Prosperity?

What Special Correspondent for CBS News’ Tom Brokaw called “the biggest electronic event ever in American history to say nothing of American politics” was the most-watched presidential debate in American history. The first presidential debate for this election year on September 26 was high stakes for both candidates, who are very close to each other in the polls.

Strong Language

The language used by each of the candidates was no less epic than the occasion that brought them together. They both predicted impending doom if the other candidate became President.

Donald Trump used words such as “disaster,” and “we’ve lost control of things that we used to have control over” when talking about his opponent’s vision for the economy.

Hilary Clinton rejoined with comments about Trump’s economic plan that we will “maybe have another recession” and “tax cuts that would add five trillion dollars to the debt.”

Economic Panic?

Both Clinton and Trump evoked more than a touch of panic about the economy with each of their word choices, but making investment decisions should not  be based on the fear of which candidate makes it to the White House. There may be short-term dips in the market—and that is to be expected. Even though election years throughout history have posted lower returns than each year before and after the election, it is usually a temporary reaction that quickly returns to normal.

Fisher Investments view on the Presidential Debate is to watch what “the candidates do, not what they say,” and keep emotion out of your investment decisions. Consistent investing without emotion, but with a balanced risk level you’re comfortable with, will most likely be the best strategy for you.

Prosperous Plans

The opening topic of the first presidential debate was titled “Achieving Prosperity.” Each candidate gave a summary of their own plan for achieving prosperity in their debate comments. Not surprisingly, each plan differed widely from one another.

Inflation has remained around a low 1 percent rate so far this year, but growth has remained slow since the Great Recession. This year’s job growth has been less than expected, and retail sales are slumping more than forecasted, but the unemployment rate remains at 4.9%. The markets are looking for growth, but will they find it? 

“We need to have strong growth, fair growth, sustained growth,” Clinton stated. “We also have to look at how we help families balance the responsibilities at home and the responsibilities at business.” Clinton’s stated plans also included a tax increase for the wealthiest Americans, paid family leave and debt-free college. She also states that Trump’s tax cuts will drastically increase the deficit.

Trump’s take on prosperity comes in the form of cutting taxes for the wealthiest Americans. “The wealthy are going to create tremendous jobs. They’re going to expand their companies. They’re going to do a tremendous job.” Many see a Trump presidency as an unpredictable wildcard situation  but some feel that he may have some positive solutions for the nation that have nonpartisan appeal.

While Clinton states that we can be “strong together,” Trump sees investment by business as a way to improve America’s economy. The comments by the two candidates seem to be exact opposites of each other, but regardless of who is elected, they will have to work with Congress and compromises will need to be made to pass legislation.

Big Picture Factors

There are global factors and trends that in the long run, are probably more influential than who becomes president. Security issues such as computer server hacking and our national borders will present us with challenges and test our resiliency regardless of who becomes President. Economic and social issues like the aging Baby Boomer demographic and the ever expanding digital capabilities that are integrating into daily life will provide new opportunities for our nation.

While it is true that the 2016 presidential candidates have polarized and impassioned followers, both candidates are still viewed unfavorable by many Americans. This may fuel some emotional debates, but come Election Day, each candidate may not have enough power to reach true and broad support from the American people. So instead of panicking about who “wins” or “loses” each debate, assess what they do, and know how it may-or may not—impact your long-term goals.