To say things haven’t changed since President Trump took office would be a “yuge” understatement.
And while things have been shaken up a bit politically, it’s likely people are feeling a sense of uncertainty in their own lives, as some of Trump’s policies and campaign promises that could affect them have yet to be rolled out.
One such area that people are turning to in these turbulent times is checking on their finances and making sure their financial futures are still stable.
It’s a concern that Martin Schamis said advisers are probably hearing a lot lately.
“Whenever you see what I would call a pretty big change like this politically, where you move from one administration to the next or from one set of economic conditions to the next, we often get asked what are the big changes, what should I plan for differently,” said Schamis, head of wealth planning at Janney Montgomery Scott LLC.
However, he said with a laugh, the financial planning answer to that question is “kind of a boring one.”
“If you put together a really smart financial plan,” said Schamis, who grew up attending Congregation Beth Or and previously led the financial planning department at The Vanguard Group, “what you’re going to find is that regardless of the situation you find yourself in, if you’re well-allocated, if you’ve tested for the sufficiency of your portfolio and retirement or meeting your goals, that really it almost doesn’t matter who’s in the White House.”
The key is to focus on what you can control, he said. So while you can’t control winning the lottery, you can control your own actions and own assets.
“You want to make sure you control things like your spending amount, savings amount. You can control the costs within your portfolio, and you can control your allocations, so how much do you have in stock, how much do you have in fixed income and other sorts of things,” he said. “What you can’t control is what happens in the market, and you can’t control what happens politically.”
“So if you focus on those things that you can control that are within your grasp, then regardless of whether Trump was in or Obama stayed in another four years, your portfolio and your financial plan should be a sound one.
“The challenging part we have right now is right now it’s just very unclear, and it’s difficult to predict or to project exactly what’s going to happen,” he added.
Rather than reacting to changes that haven’t yet happened, it’s better to focus on what you have now and what’s presently available, Schamis said.
For instance, he said to make sure you have an up-to-date portfolio and have taken your goals into account and what you’re trying to achieve with your portfolio.
“The best thing for clients to do is remain nimble, so that if specifically things like estate taxes are modified in some way that you can circle back with your attorney if necessary or with your accountant and react to it,” he said.
“There’s a lot of speculation around what might or might not happen in the tax realm or the legislative realm related specifically to financial planning, and financial planning’s not really a speculative sport … But by and large right now, for better or worse, it’s all just speculation at this point until something comes to fruition.”
In times of uncertainty, it’s best to keep focused, Schamis said.
“Focus on the costs, focus on your investment allocations, focus on managing your own expenses and sort of, to a certain extent, managing your own emotions and responses to what’s happening right now in the political environment,” he advised. “The rest of it are things that are beyond your control.”
Saly A. Glassman, wealth management adviser and managing director of wealth management at Merrill Lynch, also recommended a clear focus.
“The only thing you’re in control of is you,” said Glassman, a member of Tiferet Bet Israel in Blue Bell. “You’re not in control of the markets or your family. You’re not even in control of the stuff that happens to you — you’re only in control of your actions, so you have to take responsibility for your future.”
She outlined a few first steps.
“First you ask yourself, ‘What do I want?’” said Glassman, who wrote It’s About More Than the Money: Investment Wisdom for Building a Better Life. “Then you ask yourself, ‘What are my resources — what do I have?’ Then you ask, ‘When do I want it?’ And lastly you ask, ‘What am I going to do to get it?’ All of those are not about anyone else. It’s not, ‘When am I going to win the lottery?’ It’s about what I’m going to do.”
Glassman predicts some of the big changes that investors will see under the Trump administration include taxes, regulation, immigration and estate tax.
As far as Trump’s promised plans for tax reform, she said, “The potential for lower tax rates has some investors thinking about deferring gains. Other investors may be looking forward to lower tax rates on income in general. Investors need a customized investment plan with contingencies built in, for challenges in the economy and their personal circumstances, as well as the political environment.”
But as changes in these areas have yet to be made, the important task is to focus on yourself.
“My advice for people first considering financial planning is first, ask yourself what are your goals. Second, examine your resources. Third, consider your time frame. Fourth, make a plan for how you’re going to accomplish what you have decided is important to you.”
Both Schamis and Glassman recommend, of course, meeting with an adviser to make sure you’re on the right track and to focus on creating a smart plan for yourself.
“Focus on the things that are within our control,” Schamis emphasized, “and try and limit the impact of things we can’t control through smart financial planning.”
Contact: [email protected]; 215-832-0740
