Navigating Politics and Portfolios: Separating Financial Decisions from Election Fears

[00:00:00] Jonathan DeYoe: The economy is complex. Markets are driven by forces way bigger than the president. Our job is to build resilient portfolios, stay focused on what we can control, and avoid making impulsive decisions based on noisy headlines. All of which are political at the moment. No single election will make or break your financial future, but staying disciplined, diversified and mindful will put you in the best position to reach your goals no matter who’s in office.

[00:00:26] Intro: Do you think money takes up more life space than it should? On this show, we discuss with and share stories from artists, authors, entrepreneurs, and advisors about how they mindfully minimize the time and energies. Spent thinking about money. Join your host, Jonathan DeYoe, and learn how to put money in its place and get more out of [00:01:00] life.

[00:01:00] Jonathan DeYoe: Hey there. Welcome back to the Mindful Money Podcast.

[00:01:02] Jonathan DeYoe: I’m your host, Jonathan DeYoe. , today we are going to get into it. Before the election, I received all kinds of calls and emails about what we would do if Trump was elected the 47th, , president and I explained at the time that we do our level best to separate our politics from our portfolios, offer historical examples of, uh, it not working as well as some academic sort of statistical proofs of how.

[00:01:25] Jonathan DeYoe: Trading your portfolio because of headlines or expected headlines is never a good plan.

[00:01:30] Jonathan DeYoe: We can’t make investment policy out of chaos theory, and for our purposes, if your goals and resources don’t change, your plan doesn’t change, and if your plan doesn’t change, your portfolio doesn’t change. We recommend not changing a beautifully allocated, broadly diversified and regularly rebalanced portfolios just based on expectations or fears , or even greed about a particular event in a short period of time.

[00:01:58] Jonathan DeYoe: We invest the way we [00:02:00] invest because we can’t know the future. And because we don’t know how markets are gonna react, even if we did know the future. And that’s the thing, you have to get both of those things right? If you’re going to predict, you have to know the thing that’s gonna happen. And you have to know how markets are gonna react.

[00:02:15] Jonathan DeYoe: We can’t know either, so we don’t predict. This is a no prediction zone. If you want to talk about how we might be able to help you invest this way, please don’t hesitate to reach out. Since the election and since sort of the onslaught of executive orders began, the fear has begun to rise and the questions have been building, and today I want to answer some of those questions.

[00:02:36] Jonathan DeYoe: But before I begin, I realized this is like, what do they call it? The third wire , of investing or the, I’m not supposed to talk about this. And, , politics, , religion, , these kinds of things. We’re not supposed to talk, but let me be clear, this is not an endorsement of Trump or his policies or his approach to leadership or who he is as a person.

[00:02:55] Jonathan DeYoe: There’s plenty to criticize and I’m right there, next to most of you, , criticizing most of the listeners [00:03:00] to this podcast Anyways. And I’m not here to argue for or against him as a person or the president. What I’m here to do is help people keep a steady hand on the wheel when it comes to their portfolios, their investments.

[00:03:12] Jonathan DeYoe: One of the biggest mistakes investors can make again and again, is letting politics or any short term headline, dictate their financial decisions. The truth is, markets don’t move based on whether we personally like a president, they respond to policies. Economic fundamentals and long-term trends that go beyond any one.

[00:03:33] Jonathan DeYoe: Administration. 40 seven’s policies during his second term will have both positives and negatives. Some are gonna be great for business growth and the markets others are gonna introduce risks. Our job as investors isn’t to cheer or panic. It’s to assess the landscape, manage risk, and stay focused on the long-term financial goals that actually matter our own.

[00:03:56] Jonathan DeYoe: So making meaningful changes to your portfolio based on today’s [00:04:00] headlines or tomorrow’s expected headline has been proven time and time again to be a mistake. So as a tool to help you keep that steady hand on the wheel. Today I’m gonna go over five potential negative items and five potential positive items.

[00:04:14] Jonathan DeYoe: I wanna limit the scope of the argument to those areas that matter to our investment portfolios. Again, my point is to help you separate your politics from your portfolio decisions, whichever side of the aisle you happen to be on. So let’s start with those five potential negatives of 40 seven’s economic policies.

[00:04:31] Jonathan DeYoe: First, obviously, tariffs, trade wars. These lead to higher costs for consumers and businesses. So Trump’s aggressive trade policies, including tariffs on China and Canada and Mexico, aim to boost domestic production, but also raise costs for US businesses and consumers. We already know his second term will see even steeper tariffs than his first term.

[00:04:57] Jonathan DeYoe: Broadly applied tariffs are stupid [00:05:00] and hurt Americans by raising prices. , You may recall the Smoot Hawley tariffs of 1930 that deepened the Great Depression and by triggering retaliatory tariffs, which we’ve already begun to see , from Trump’s , current round of tariffs. So a little bit less bad, a little bit less stupid are targeted tariffs.

[00:05:18] Jonathan DeYoe: So targeted tariffs can have a positive secondary effect. They can . Protect domestic production. They can shield US workers from unfair competition and they can support other national priorities like climate policy, but they are still inflationary to the extent that tariffs are passed on to consumers and not absorbed by profit margins or currency effects.

[00:05:39] Jonathan DeYoe: Tariffs of all kinds lead to higher consumer prices as tariffs act as kind of a hidden tax that companies pass on to customers, , essential goods such as cars and electronics and food could become more expensive. , they lead to increased costs for us manufacturers who rely on imported materials like steel and semiconductors to produce goods domestically.[00:06:00]

[00:06:00] Jonathan DeYoe: This could hurt American businesses rather than help them. . It can also be lead to global economic uncertainty as countries retaliate with their own tariffs, reducing US exports and hurting key industries like agriculture and energy, where we do, , export. And then finally, there can be disruptions to supply chains, forcing businesses to make costly adjustments to production and distribution strategies.

[00:06:21] Jonathan DeYoe: Anytime you increase costs in a system, in any way, this will become important in a moment. Right. , anytime you increase costs in a system, these costs must be borne by somebody. Some portion of the cost is always borne by the consumer. This is even more so in a trade war. So while protecting American industries is a valid goal, a prolonged trade war could let a fire under inflation, slow global growth and weaken economic stability.

[00:06:51] Jonathan DeYoe: Second, and I apologize if I sound like a broken record here. , the ballooning federal debt and rising interest payments are an issue. We’ve talked about this for [00:07:00] months now, and it isn’t just Trump policy, it’s more of an ongoing problem. This unfunded spending trump’s first term tax cuts and stimulus spending contributed to growing federal deficit and a second term could see both a reduction in tax receipts.

[00:07:15] Jonathan DeYoe: High levels of government spending and borrowing, making the impossible scenario of the debt even more impossible for decades. The national debt has grown between 1940 and 2023. The debt to GDP ratio in the US averaged just under 66%. Today it stands at almost twice that, at 126%.

[00:07:35] Jonathan DeYoe: That’s, , our debt is 126% of our national GDP. For many of those years, , 1980 to roughly 2022, the actual cost of servicing that debt declined. As rates declined, and this papered over the problem of too much debt. But in 2022, the zero interest rate environment came to a screeching halt,

[00:07:58] Jonathan DeYoe: the debt service costs threatened [00:08:00] to push us into a forever deficit and a spiraling debt service problem. This brings to mind, Ernest Hemingway’s famous line in the sun also rises. How did you go bankrupt? Two ways gradually. Then suddenly if the US doesn’t do something about the debt deficit, we will eventually run into a wall.

[00:08:19] Jonathan DeYoe: So some key concerns about the deficit, , is federal debt reaching sort of unsustainable levels? I think , we’re approaching this point. , but unsustainable federal debt leads to higher borrowing costs for the government and reduces the government’s fiscal flexibility.

[00:08:34] Jonathan DeYoe: In the face of a future economic downturn. It also leads to rising interest payments on debt,, which already exceeds defense spending and could start to crowd out some critical programs like infrastructure, healthcare and education. Also, it puts pressure on interest rates as increased government borrowing competes with private sector credit needs, making mortgages and business loans even more expensive.

[00:08:59] Jonathan DeYoe: And finally, [00:09:00] it can create a long-term economic drag as. Future generations may face either higher taxes or reduced services to manage this growing debt burden. So while tax cuts and spending can stimulate short-term growth, unchecked deficits pose long-term risks that could weigh on our economic stability.

[00:09:20] Jonathan DeYoe: Third, there are inflationary pressures that lead to market volatility. So the combination of tariffs and fiscal spending and deregulation could create inflationary pressures, particularly if economic growth remains strong, but supply chains remain constrained. So some key risks in this area include, , higher inflation, reducing purchasing power, making everyday goods and services more expensive for consumers.

[00:09:46] Jonathan DeYoe: We could see increased volatility in financial markets as investors react to uncertainty around inflation, interest rates and economic policies. We could see a potential need for aggressive federal reserve action, forcing the central break , to [00:10:00] raise rates to counteract inflation, which would slow it, , economic growth.

[00:10:04] Jonathan DeYoe: And then it’s, there’s always this issue of uncertainty for businesses, , this fluctuating of input costs and the unknown. You know, the zigs and zags of policy makes planning and investment decisions very difficult as a even a small business, but especially as a, national or a global business. So while moderate inflation is normal and sort of a growing economy, excessive inflation could erode confidence and can erode economic stability.

[00:10:30] Jonathan DeYoe: Fourth, , a big one, and we’ve already seen this in some of the global reactions. , geopolitical risks and then the global market uncertainty. So Trump’s foreign policy stance has. Often been unpredictable, to say the least. , it creates tensions between the US and China. , with Russia, , and the Middle East.

[00:10:51] Jonathan DeYoe: The increased geopolitical risks could have serious economic consequences, and some of these include trade disruption. So as conflicts with our key economic partners [00:11:00] like China, , lead to reduced market access for US businesses. You know, we say to China, we’re gonna raise tariffs. China says to us, we’re gonna raise tariffs.

[00:11:08] Jonathan DeYoe: We say to China. You can’t, you know, , sell this product into our economy. China says to us, you can’t sell this product into our economy. So, , we’re the consumers of the world for sure. They are the growing consumers of the world. Our businesses want access to, , the ability to sell goods and services into China.

[00:11:28] Jonathan DeYoe: That’s one issue. Second issue, energy market instability. Particularly if tensions and release disrupt global oil supplies, which might lead to. Oil price spikes. Trump is gonna try to, you know, drill, baby drill to sort of cover that. , you have to remember that, the stuff that we export is different than the stuff that we import.

[00:11:45] Jonathan DeYoe: You know, not all oil is the same. And then there’s this huge potential for military conflicts, which could increase defense spending and create uncertainty in financial markets, not to mention devastation, , for countries and the people on the ground. And with all of [00:12:00] this unknown, you also receive some foreign investment hesitation.

[00:12:03] Jonathan DeYoe: Well, people don’t want to invest in a place that they don’t know what’s gonna happen. Uncertainty makes the US a riskier place for global businesses to invest. Okay. Markets dislike this uncertainty and continued geopolitical unpredictability could weigh on investor confidence and economic stability.

[00:12:20] Jonathan DeYoe: The fifth and, final of our negatives is this Weakening safety nets, , leads to long-term instability. So Trump has continued to push for cuts to social programs such as social security. Medicare and Medicaid and other government assistance programs, , food stamps, et cetera, while reducing government spending can help manage deficits, weakening the safety net poses real risks for people.

[00:12:47] Jonathan DeYoe: So increased financial strain on retirees and low income Americans, especially as costs for healthcare, housing, and daily living continues to rise. Greater economic volatility as reduced safety nets mean fewer automatic stabilizers during [00:13:00] recessions, potentially deepening economic downturns. This puts a whole huge bigger burden on private savings and employer benefits, , forcing individuals and businesses to shoulder more responsibility for retirement and healthcare, which means we end up saving more and spending less.

[00:13:16] That leads to long-term impact on consumer spending. As millions of Americans have to take care of their own issues, they’ll have less disposable income. , so they’re saving more, they’re spending less. That slows economic growth, and we always have to remember that the consumer is 70% plus of the US economy’s GDP.

[00:13:31] Jonathan DeYoe: So while fiscal responsibility is important, cutting essential programs could create broader economic challenges, particularly for aging populations and lower income communities. The balance between government support and individual responsibility is critical to long-term financial stability.

[00:13:47] Jonathan DeYoe: So the five in summary, the five potential negatives are, , tariffs raise prices on consumers. Cutting taxes leads to a ballooning national debt and increasing debt service costs. The [00:14:00] economy is already doing well. Increasing GDP could easily push us into inflation and more aggressive fed tightening.

[00:14:06] Jonathan DeYoe: There’s always this , geopolitical risk, including armed conflict that always reduces economic stability. And then finally, if we cut the safety net programs, it can save money in the short term, but it can hurt people and reduce consumer spending in the long term. And again, that’s 70% of GDP.

[00:14:24] Jonathan DeYoe: So. Those are the negatives, and this is where the pushback is gonna start coming. I’m gonna turn to the five potential positives from 40 seven’s economic policies. Again, I’m recognizing that many of the folks in the mindful money audience cannot see any positives at all. So I hope you can open your mind and let just a little bit and let some of this stuff in There are potential positives, especially as we think about, , our portfolios which makes people hate portfolios.

[00:14:49] Jonathan DeYoe: It makes people feel guilty about making money, and I understand that. I hear this every day. But the point once again, is to reduce our reactivity when it comes to our [00:15:00] investments

[00:15:00] Jonathan DeYoe: . So the first positive tax cuts, and I, I realize we just talked about this as a negative, but tax , cuts can lead to, , business growth as well.

[00:15:08] Jonathan DeYoe: So. Trump’s 2017 Tax Cuts and Jobs Act significantly reduced corporate tax rates aiming to encourage business investment, job creation, and economic expansion , and that is what happened. So his second term could bring additional tax cuts, particularly hopefully targeting middle class families and small businesses.

[00:15:27] Jonathan DeYoe: There are two points I wanna make here First. Anytime you decrease costs on a company, whether that’s from lower priced raw materials, whether that’s lower wages or lower taxes, the reduced costs at least partially flow to the company’s bottom line. I. This means more profits for the same revenues. This is just simple math.

[00:15:49] Jonathan DeYoe: This is addition and subtraction. Higher costs lead to lower earnings. Lower costs lead to higher earnings, and stock prices follow earnings. Taxes are a [00:16:00] cost. Tariffs are also a cost. So I referenced this briefly before in the discussion of the negatives, specifically regarding the tariffs. Anytime you increase costs in the system in any way, those costs must be borne by someone.

[00:16:16] Jonathan DeYoe: So according to an a National Bureau of Economic Research paper, originally written in 2020, but revised in 2023, about 50% of corporate tax incidents falls on consumers. So if you wanna look it up, , the paper is entitled Corporate Taxes and Retail Prices. It is NBER working paper, , 2 7 0 5 8. In other words, we can’t have it both ways when we’re arguing, if we add costs, be those costs, tariffs or corporate taxes, the added costs get passed through in some way to the consumer.

[00:16:51] Jonathan DeYoe: To argue against tariffs because they raise consumer prices and for corporate taxes, which also raise consumer prices, is at least [00:17:00] partially disingenuous or misinformed. So I’m not saying that tax cuts are needed or even desired. I’m purely saying that tax cuts often have positive short run benefits, more business investment, , more consumer spending, and more foreign investment, better stock market performance.

[00:17:17] Jonathan DeYoe: So. Some potential benefits from reduced taxes could be encouraging businesses to reinvest by allowing companies to retain more of those profits, which potentially increases capital expenditures, hiring and wage growth. It could boost consumer spending by putting more money in the hands of individuals and families stimulating demand across multiple economic sectors.

[00:17:38] Jonathan DeYoe: It could. And usually does strengthen stock market performance as corporations use tax savings for dividends and stock buybacks and reinvestment, , increasing shareholder value. Again, we’re shareholders. And then it can also attract foreign investment by maintaining a globally competitive corporate tax rate, making the US an attractive destination for multinational [00:18:00] businesses.

[00:18:01] Jonathan DeYoe: However, while tax cuts can drive short term economic growth, they also contribute to budget deficits, which could lead to a long term. Fiscal challenge, , those challenges we discussed above.

[00:18:11] Jonathan DeYoe: Second, this is the second positive, and again, I, I understand it would get pushback. I’m just talking in terms of our investments. Deregulation may lead to industry expansion, so. Borrowing from legacy Republican playbooks. One of Trump’s key economic policies has been reducing regulations across industries, especially energy finance and manufacturing.

[00:18:33] Jonathan DeYoe: By cutting red tape, businesses can operate with a much greater efficiency and fewer sort of compliance cost. , I often tell a story about a buddy of mine who owns a retail store in California, , , there’s a group. That a hundred years ago in this is a, state of California, , department that, oversees basically cash registers.

[00:18:56] Jonathan DeYoe: So a hundred years ago, , , a critical part of the cash register was [00:19:00] the ability to weigh the amount of stuff you were buying in order to keep sellers from putting a thumb on the scale, what they used to do is they used to send somebody out to, to take a look at them and their process and that group still exists.

[00:19:14] Jonathan DeYoe: And my buddy who owns the retail store pays, I don’t know, 500, a thousand dollars a year to this state group in California. , for someone to come out and look at his cash register to make sure he’s not, you know, rounding the sense the wrong way, or make sure he’s not somehow putting a thumb on the scale.

[00:19:30] Jonathan DeYoe: Now he’s been in the business for 22 years. No one has ever come , and looked at his cash register, like he consistently every year pays this fee and no one comes and looks at it. So this is the kind of thing we’re talking about. By cutting bureaucratic red tape, business can operate with more efficiency and fewer costs.

[00:19:50] Jonathan DeYoe: Now, the benefits to this is when you have lower operating costs for businesses, particularly in industries such as , banking, oil and gas and construction, they face these huge [00:20:00] heavy regulatory burdens., you get these lower operating costs that leads to higher profitability.

[00:20:04] Jonathan DeYoe: When you sort of implement these kind of, , deregulations, you might see faster economic growth. It makes it easier for companies to launch new projects, to expand operations, to, , participate in, mergers and acquisitions, and to innovate without excessive government oversight. Now, this is not an argument.

[00:20:22] Jonathan DeYoe: Again, I’m just going back to it. It’s not an argument, against oversight. It’s less oversight, increases profitability, more oversight, increases costs, and it’s mathematical the relationship. , so Another thing you might see is with deregulation is job creation in key industries, particularly in sectors that benefit from the deregulation.

[00:20:41] Jonathan DeYoe: Again, energy, transportation, industrial manufacturing, banking, et cetera. So one of the costs of doing business is regulation. And so if you reduce regulation, you might have an increased competitiveness for US businesses in the international market. So , as there’s a reduced regulatory [00:21:00] burden, , profitability is increased and that allows firms to compete more effectively in the international markets.

[00:21:05] Jonathan DeYoe: So. While deregulation can boost business activity. Yes. It also raises concerns about things like environmental protections, , worker safety, financial stability, , these can pose long-term risks. So we have to weigh and find a middle path through the two extremes of this.

[00:21:24] Jonathan DeYoe: Third, if you are. As I am very worried about the environment, then this one isn’t gonna be seen as a positive.

[00:21:34] Jonathan DeYoe: But , there is a potential positive in terms of our investments with energy independence and infrastructure growth. So Trump’s energy policies have focused on expanding, increasing drill, baby, drill, domestic oil, gas, and nuclear production while rolling back environmental regulations again.

[00:21:53] Jonathan DeYoe: This isn’t a me saying I’m, I’m pro this, I’m saying that this has positive impacts on, or can have positive short-term impacts [00:22:00] on our portfolios. So the second Trump term could see further investment in infrastructure projects, true proof roads and, and bridges and technology networks. And some of the economic benefits from this could include lowering energy costs for consumers and businesses.

[00:22:13] Jonathan DeYoe: You know, one of the things that we see zig and zag the most is the cost of energy. That’s why there’s a, sort of CPI and CPI core. , it removes some of the. Costs that are more volatile. So , if we reduce energy costs for consumers and businesses, that reduces, , operational expenses and increases disposable income for people and profitability for businesses greater energy security.

[00:22:35] Jonathan DeYoe: So decreasing reliance on foreign oil and minimizing exposure to geopolitical energy disruptions can be a huge benefit for both, people at the pump and for businesses. So this may mean more high paying jobs in energy and construction, particularly in fossil fuel industries and infrastructure development and a modernized infrastructure could improve transportation, broadband access, logistics, [00:23:00] strengthening us economic competitiveness.

[00:23:03] Jonathan DeYoe: And I think that some of these things, , if you take the drill, baby drill, take the energy issues out of it, some of these things can be bipartisan. Some of these things, you know, we want to have. Strong US competitiveness, and so broadband access and, know, infrastructure, logistics, these kinds of things might be something that, that we see some agreement on.

[00:23:21] Jonathan DeYoe: However, and it’s really important that to the extent that we’re talking about increased energy production and the economic benefits of increased energy production, we also have to recognize that it creates environmental. Risks and large infrastructure projects often require significant government spending.

[00:23:38] Jonathan DeYoe: And we’ve already talked about how if we’re going to reduce taxes, , ,. We can, but we shouldn’t probably also at the same time, increase our spending. We need to find a path to get us back on, sort of fiscal discipline,

[00:23:50] Jonathan DeYoe: fourth trade policy and sort of domestic.

[00:23:55] Jonathan DeYoe: This idea of a domestic manufacturing revival. So Trump has [00:24:00] prioritized, renegotiating trade deals and imposing tariffs to reduce US trade deficits and bring manufacturing jobs back to American soil. So a second term is just, is obviously, and we’re already seeing it will further strengthen this focus and this might lead to more domestic production and job creation.

[00:24:16] Jonathan DeYoe: Particularly in industries like automotive, steel, and technology, which have historically relied on imports, we might see stronger negotiating leverage with global trade partners. You know, right now we’re in this period of sort of, you know, tariff and retaliatory tariff and, and conversations. And we say we’re gonna do a thing and then we, we, we understand, oh, that’s probably a bad thing.

[00:24:35] Jonathan DeYoe: So we change that. So this could lead to a better deal for the US , businesses and US employees. , it could also just totally disrupt and create long-term , trade partner problems. We could have, if it works to move some of the manufacturing jobs back to the US we might have reduced dependency on foreign supply chains, making our economy more resilient to global shocks, [00:25:00] such as pandemics or geopolitical conflicts.

[00:25:03] Jonathan DeYoe: And then finally, one of the things that , we do here talked about quite a bit is this increased protection for US farmers and manufacturers. So. decades ago, we started handing the baton of manufacturing over to the international markets. By doing that, we’ve seen, , currency translation, but we’ve also seen sort of , the gutting of the American middle class Now.

[00:25:26] Jonathan DeYoe: One of the paths to ensuring that everybody competes on a level playing field, you know, domestic, , producers and foreign producers, is this use of tariffs. And the problem is tariffs can lead to higher costs for consumers and businesses. , and prolonged trade wars often create uncertainty that obviously negatively impacts markets and trade.

[00:25:48] Jonathan DeYoe: Fifth. Trump frequently emphasized stock market performance as a measure of economic success, and his policies have genuinely been market friendly. [00:26:00] I think we’re not gonna see much different from that ultimately in this second term. So the policies in place that we’ve already talked about, some of these encourage corporate earnings growth, so through a.

[00:26:11] Jonathan DeYoe: Combination of tax policies and deregulation and sort of pro-business initiatives, we should see a continuation of corporate earnings growth. He may shoot himself in the foot with all the zigs and zags, so we have to watch carefully. But if, the general tendency to reduce regulation and reduce tax on business and sort of promote, pro-business initiatives, , continues, we should see increased.

[00:26:38] Jonathan DeYoe: Corporate earnings. This means we’ll have a favorable investment climate. We’ll have a tailwind for our portfolios. This reduces uncertainty for businesses, and it promotes capital inflows from, , from investors domestically and, , investors internationally. What we may see some financial support for the markets through both monetary and fiscal [00:27:00] policy.

[00:27:00] Jonathan DeYoe: Now, this is a. A potential positive , that’s sort of wrapped in a potential negative because we’ve just talked about this. The Fed is gonna be on watch for any of these policies to be inflationary, , to the extent that the policies can be maintained in a way that are non-inflationary. We will see, , Powell , and the Fed will be kinder to us with monetary policy.

[00:27:23] Jonathan DeYoe: The risk that I see, and we talked about it a moment ago, is , the fiscal policy, our spending policy to the extent that we’re driving for both tax reductions and more spending, that the only, the only way you can have both of those is to increase debt. And by increasing debt, you’ll increase debt service, which , drives us closer and closer to the, you know, judgment day.

[00:27:44] Jonathan DeYoe: , someday investors won’t wanna buy our debt, and if investors don’t wanna buy our debt, then. the cost of that debt will skyrocket, and that’s the thing we have to be careful of.

[00:27:53] Jonathan DeYoe: markets are often influenced by tons of factors beyond policy. And while pro-business policies can [00:28:00] drive short-term gains, long-term stability depends on broader economic fundamentals.

[00:28:04] Jonathan DeYoe: So the five potential positives are tax cuts and business growth incentives. This is just math. Lower taxes equals higher earnings, at least initially. Deregulation. Second deregulation reduces compliance costs . Lower costs means higher earnings. Again, this is just math. Third, energy and infrastructure spending can lead to more high paying jobs domestically and greater security.

[00:28:30] Jonathan DeYoe: Fourth trade policy. While it seems chaotic, it has led to better trade deals in the past. However, the tariff retaliation cycle is likely to limit the rebirth of domestic manufacturing.

[00:28:42] Jonathan DeYoe: There is a trend since COVID of some domestic manufacturing coming back because of, , supply chain issues, , because other people treated , the pandemic differently , than we did, and things couldn’t get built, things couldn’t get done, which created problems on the home front.

[00:28:58] Jonathan DeYoe: But increasing [00:29:00] tariffs and then the response of increasing tariffs against us, that whole cycle. Probably limits, , an increase in the rebirth of domestic manufacturing.

[00:29:12] Jonathan DeYoe: The fifth thing is actually really interesting to me because , this is stock market as metric. So an old coach of mine told me to measure the things that matter to me, and he said that What?

[00:29:21] Jonathan DeYoe: Why? Because what gets measured gets done. The stock market matters to Trump. He wants it to go up as proof of his presidential skill. And that incentive matters at least in the short run. So. I can, I can hear people saying, okay, Jonathan, this isn’t terribly helpful. You’ve given us a slew of reasons to buy and a slew of reasons to sell.

[00:29:42] Jonathan DeYoe: So I don’t want you to misunderstand. , these are not reasons to buy or sell. These are all unknowns and unknowables at this point. We invest the way we invest because we admit we don’t know. We do not recommend making meaningful changes to portfolios unless and until there are major [00:30:00] changes in your life or in your goals.

[00:30:02] Jonathan DeYoe: We talked about the order of operations at the top. Know your resources, discover your goals, write your plan, create your portfolio. That’s the order. Nowhere in there does, doesn’t say, you know, consult your crystal ball, , develop a better market theory or stay on top of all today’s headlines, your resources and your goals.

[00:30:21] Jonathan DeYoe: Determine your plan. Your plan determines your portfolio. If your resources and goals don’t change. Your plan doesn’t change. If your plan doesn’t change, your portfolio doesn’t change. The key is staying focused on what really matters. No one who sits in the Oval Office can have any effect long term because somebody else is gonna sit in the Oval Office next.

[00:30:45] Jonathan DeYoe: And the more the prior person changes it, the more the next person will change it back. And maybe it’ll be, maybe it’ll be multiple terms and then the party shifts. So no matter who sits in the Oval Office, one thing remains true—the best investment strategy is a [00:31:00] disciplined, long-term approach that separates personal politics from financial decision making.

[00:31:06] Jonathan DeYoe: Trump’s policies could boost certain sectors while creating headwinds in others. Some investors are going to be tempted to make emotional moves either. Out of fear or into excitement. History shows us that these moves usually backfire, don’t make them. The economy is complex.

[00:31:23] Jonathan DeYoe: Markets are driven by forces way bigger than the president. Our job is to build resilient portfolios, stay focused on what we can control, and avoid making impulsive decisions based on noisy headlines. All of which are political at the moment. No single election will make or break your financial future, but staying disciplined, diversified and mindful will put you in the best position to reach your goals no matter who’s in office.

[00:31:49] Jonathan DeYoe: Thanks for tuning into the Mindful Money Podcast. I hope. This is helpful, and uh, we’ll see you again next week.

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