While no one has a crystal ball, assessing ongoing economic and political trends can inform our opinions of what is to come and help us decide what financial moves to consider in order to be ready for the dawn of a new decade.
In 2019 we brought over 850 of the best advisors onto our platform so we can help you find the right one for your needs. We’ve asked a few of them to share with us what they think will matter most for clients in 2020, whether in relation to politics, regulation/taxation, the economy, financial markets, or trends in personal money management.
The 2020 Election Market Predictions
“We stopped predicting elections after 2016. But we are confident the Presidential Election will dominate headlines in 2020. However, we don’t believe the election is ‘investable’ yet.
“President Trump is keenly aware of the impact that micro-releases about trade ‘progress’ have on the markets, both positively and negatively. But China and President Xi may continue to balk at meaningful progress until the election. Against this backdrop, clients will benefit greatly from ‘institutionalizing’ their investment management process. Disciplined portfolio rebalancing and tax-loss harvesting provide critical tools to take advantage of market (over)reactions.
“While financial markets are pricing in one final 25 basis points cut in 2020, we believe the Federal Reserve will hold interest rates steady. We recommend remaining shorter in duration and higher in quality with fixed income investments.
“Uncertainty will also shroud tax planning in 2020. While significant changes to the tax code may be unlikely, individuals should retain flexibility until late in 2020. If opportunity arises, we should see a flurry of activity come December with new trust and giving activity as well as Roth IRA conversions. Additionally, consider deferring local tax payments and/or contributions to donor advised funds where possible. For individuals using the standard tax deduction, explore funding charitable contributions with Required Minimum Distributions (RMDs) rather than direct cash contributions.”
Michael Paley, Chief Operating Officer, Klingman & Associates, LLC.
Klingman & Associates is a full-service, industry-recognized wealth manager most recently named as a Barron’s Hall of Fame Advisor in 2019. They are a New York, New York based financial advisory firm on the Harness Wealth platform.
Market Regulation in 2020
“In 2019, we experienced frequent discussion by regulators, politicians, and the media about the perceived ill effects resulting from the concentration of market power in a handful of large technology companies.
“We expect 2020 will bring not just talk, but action, as anti-trust regulators attempt to disrupt the status quo. However, it is important to understand that any regulatory response will take years to wind its way through the courts, and one needs to look no farther than Europe to see that most anti-trust activity has done little to weaken the position of these companies.
“This is because, for the most part, their market power is derived not from illegally restraining competition, but from leveraging scale to provide their users with superior products and services.”
Matt Gordon, CFA®, Portfolio Manager & Senior Research Analyst, Golub Group
Golub Group is one of the Bay Area’s leading independent wealth managers with deep experience and expertise working with technology professionals. They are a San Mateo, California based financial advisory firm on the Harness Wealth platform.
Small Businesses and Entrepreneurs in 2020
“The market for buying and selling businesses has been strong over the past decade and will continue to be so as we launch into the new one. We will continue to see a sellers-market into 2020, but that tide may begin to turn.
“The predicted senior tsunami of retiring baby-boomer businesses coming on the market was slow to materialize over the concluding decade yet is starting to build momentum. Buyers – whether the Boomer’s, Gen-X or Millennial family members taking over for mom and dad or other enterprising entrepreneurs – should expect to ‘kiss a lot of frogs.’ Many Baby Boomers have not prepared adequately for transferring the ownership of their business to someone else. The business may be lacking in many areas that create sustainable value, like a management team, customer and supplier diversification or strong systems and procedures. This presents fantastic opportunities for buyers, willing to find the right frog, clean it up and transform it into royalty.
“2020 will continue to hold uncertainty from an economic and political standpoint. Next-generation entrepreneurs will take a more disciplined and collaborative approach to assessing the strengths and weakness of their companies and planning for both its growth and contingencies.”
Ryan Hauber, Partner, Honkamp Krueger & Co., P.C.
Honkamp Krueger & Co, P.C. is a full-service CPA firm and continuously ranked as a Top 100 CPA firm per Accounting Today. They are an Iowa based Certified Public Accounting (CPA) firm on the Harness Wealth platform.