With the Presidential election this week, I thought I would do a quick portfolio check to see where our retirement portfolio is sitting before the markets react. It seems a big enough change-point, that I would keep track of where we are at – at this moment in time.
The good news is that despite the pandemic sell-off in March, we’ve weathered the 2020 storm(s) well in the last 7 months.
While the S&P 500 is up only a little in w020 (+1.2% YTD), we favorably exercised most of our remaining MegaCorp stock options when they surged in March. Those returns got reinvested in S&P 500 Index Funds when the market bottomed out near St. Patrick’s Day. As a result, year-to-date, our overall portfolio is up a solid 10% – despite a big cash buffer, bond funds, and low-interest private real estate loans.
I have to say, I couldn’t have imagined 10% portfolio growth when the 2020 Great Lockdown began. We’re not out of the woods yet – but so far, so good!
I’m guessing who wins the election tomorrow won’t actually matter a lot for our finances going forward. With our MegaCorp options largely sold off, we’ve entered a phase of our life where we don’t really have any substantial income anymore. The biggest impact might be an increase in the capital gains rate – if that comes to be.
While the market has performed well under Trump, I saw articles recently saying that Goldman Sachs and JP Morgan expect better future returns under Biden than Trump. It sounded like they believed government spending would go up more behind a ‘blue wave’, although I worry what that means for the national debt & inflation.
There are a lot of historical analyses of which party benefits Wall Street the most, but I think there are so many confounding variables it is impossible to say. This CNBC article comes up with the right answer: ‘it depends’. Whether red or blue is in charge, there is always something to an invest effectively in and always unexpected events beyond anyone’s control.
That’s a good thing given a 30-40 year retirement will span 7-10 different Presidential terms and 14-20 different Congressional changes. I’m not sure what the next one will bring, but I will be hoping for the best whoever wins.
How have you weathered 2020? What expectations do you have for your portfolio after the election?