President-Elect Donald Trump will return to the White House on January 20th, and the first few days can bring forth significant policy changes. These changes will impact many parts of the world, and savvy consumers can boost their net worth during the Trump Economy.
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The unique detail about Trump’s upcoming presidency is that people already have a good idea of what to expect. Trump was previously in the White House from 2016 to 2020, and he is the second President in history to lose his first re-election bid and still end up returning to the White House later on.
These are some of the money moves to avoid until Trump takes office.
Mortgages or Refinancing
Adam Ferrari is the CEO of Phoenix Capital Group, an investment firm that specializes in oil and gas ventures. Before founding the firm, he started at BP in the Gulf of Mexico, moved through various leadership roles, and had a stint in investment banking at Macquarie Capital. He believes taking out a mortgage or refinancing right before Trump gets back into the White House is a big mistake.
“Avoid locking in fixed-rate mortgages or refinancing now…Trump’s policies could lower interest rates.”
Trump clashed with Jerome Powell during his first term, requesting lower interest rates. Trump has made similar demands leading up to his second presidency.
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Investments Solely Based on Policies
Chad Gammon, CFP is the owner of Custom Fit Financial, a financial planning firm that guides individuals through their financial journeys. The company offers services for budgeting, cash flow management, insurance reviews, tax strategies and retirement planning. While his commentary doesn’t imply which way the stock market will move during Trump’s second presidency, he offered a prudent tidbit for middle class Americans who are investing or considering it.
“It’s important to avoid making investment decisions solely based on campaign proposed policies,” he said. “Markets often experience volatility during political transitions. Maintaining a long-term perspective is typically wiser than reacting to short-term uncertainty.”
The S&P 500 has maintained an annualized 10.57% return over the past 100 years. Those years have included wars, economic recessions, hyperinflation, many political leaders and other variables.
Ferrari also mentioned that the middle class may want to hold off on investments leading up to Trump’s inauguration.
“With Trump likely to support domestic energy production, consider holding off on major investment moves until his plans for oil and gas sectors are clearer.”
Excessive Spending
Ferrari suggested good investment opportunities may show up shortly after Trump’s inauguration. Spending money right before the Trump Economy goes into full swing may not be the best move since you’ll have less cash available for investments.
“Don’t overspend on non-essentials,” he noted. “Keep cash ready for potential tax cuts or energy-related investment opportunities.”
It’s always good to keep non-essentials as low as you can. That’s a good money habit in general, but Trump’s policies seem promising. The prospect of lower interest rates and more investments in the energy sector can lead to higher returns, but investors won’t know for sure until Trump enacts his proposed policies.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out The Trump Economy Begins: 5 Money Moves the Middle Class Should Make Before Inauguration Day.
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This article originally appeared on GOBankingRates.com: The Trump Economy Begins: 3 Money Moves the Middle Class Should Hold Off on Until Inauguration Day
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
