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Joe Biden policy and its impact on economy and your savings

Joe Biden policy and its impact on economy
and your savings

Joe Biden is the new President of the USA.

You might think, it has nothing to do with you in Australia, but the outcome of this election might have a bigger impact on your financial life, your savings and your investing strategy than you think.

With Biden in power, we are going back to Obama times and similar policies:

1. Most importantly Biden wants to control coronavirus in US ahead of the full deployment of vaccines.
2. He wants to increase corporate and personal taxes reversing Trumps tax cutting plans
3. He plans to spend lots on infrastructure – hint for you – worth paying attention to
4. Plans to concertante on climate policies and for US to reach net zero emission by 2050 – so climate change will become a big part of US policies now – another hint for you
5. He wants to strengthen Obama system of healthcare
6. Biden, similarly, to Obama before him, wants to rebuild good relationship between US and other countries, Europe and World Trade Organisation, with China, which hopefully will end Trump’s trade war – that alone will have a huge impact on behaviour of international markets and shares and Australian market and ultimately also our relationship with China – our biggest trading partner

All of those proposals need to go through Senate, and could be blocked, but just that short list tells you of the direction in US policies, which will impact the whole world and Australia and you and me personally.

So considering the above, maybe you should start thinking:
  • Is this a time when a good investment portfolio review is necessary?
  • Are my super assets invested correctly?
  • Should I make changes to my asset allocation, to the exposure to specific industries or assets?

This review alone, can have an enormous impact on the value of your retirement savings.

So far, the market responded positively to news of the new President being selected.

Biden’s plans of more diplomatic resolution of international tension between US and ….basically any other country, especially China, will be a positive outcome for Australia, our economy and your savings.

So bottom line, what is the benefit of Biden’s policies for Australia and you:
  • A stronger US economy will only benefit the Australian economy
  • It would also indicate a stronger and more stable relationship between US and Australia, which can only be beneficial for all
  • Reducing tension between US and China in favour of more diplomatic and cooperative approach will also benefit Australia and our relationship and trade with China

A major win, I think we all agree on this one, would be US approach to the change US economic activities when it comes to climate change. Not only a big win for Americans, but that might also force our government to finally agree that we do have a climate change issues, and Australia should also do their bit to come to the party and introduce policies to limit emission and support new green industries.

But US approach on that front will also force many Australian companies that trade internationally as well as many international giants to apply in their activities a more aggressive response to climate change as well.

Introduction of new fiscal stimulus in US will also benefit Australian shares and the Australian dollar, meaning that once the international boarders have been opened and we can again enjoy overseas trips, our dollar will be able to buy you so much more holiday and enjoyment overseas.

I invite you to check out what’sbeen happening to AMP and why I think you should take steps ASAP. The second video is the series of how to be smart with your super and strategies on how to utilise super to your advantage.  

 

by:  Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement

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