With a Democratic House, Senate, and White House, pundits are making their predictions about possible market outcomes for 2021. What equity styles and/or sectors will prevail under a blue “mini-wave”? No one truly knows with 100% conviction what markets will do prospectively, but (fortunately or unfortunately) this will not stop the multitudes of market analysts from making their predictions.

Against the above backdrop, some analysts are recommending the following style, sector, and/or bond investments as Democrats take control of Congress and the White House:

• Equity Style Recommendations - Value

• Equity Sector Recommendations - Clean, Green, and Solar Energy; Electric Vehicles; Regional Banks; and Infrastructure

• Bond Recommendations - Bond yields should move higher and the yield curve should steepen

What are my financial advisor thoughts regarding the above? Presidential elections normally do not establish or signal large market shifts themselves. The Federal Reserve and the Legislative policy promulgated by such administrations is what usually drives the market. For example, if the Legislature were to raise taxes, such action might slow down a bull market. Will the Federal Reserve raise interest rates? Well, this too can slow down a market. However, broadly diversified, globally allocated, long-term investment portfolios need not be so concerned about changes in political administrations.

Why? Because if you own “the market” (e.g., both US and international total market index funds), then you own some value holdings, some clean energy holdings, some electric vehicles (remember, Tesla just joined the S&P 500), as well as, some intermediate core bond holdings. Your portfolio is already structured to capture cyclical or structural market changes with very little effort (read as almost none) on your part.

For additional information about this topic, please click on the title above. If you have questions about investing, your retirement plan, or your current investment portfolio, please feel free to contact Intelligent Investing at www.mynmfp.com/new-clients for a no-obligation consultation.

DAVID L. HOGANS

David L. Hogans, Esq. is an author and the founder of Intelligent Investing, Inc., a registered investment advisor firm located in Albuquerque, NM. He earned his Bachelor of Science in Chemical Engineering (ChE) from Virginia Tech and his Juris Doctorate (JD) from the University of Dayton. Mr. Hogans is licensed to practice law in the states of Virginia and New Mexico, as well as, before the Federal Patent Bar. For more information about Mr. Hogans and his firm please see his ADV filing with the Securities and Exchange Commission (SEC) .