We tend to think that the market and investors are more comfortable if they think neither party can be a sweep: Wealth Advisor

Jana Shoulders, Mariner Wealth Advisors joins the On the Move panel to discuss the impact that the 2020 presidential election may have on the markets.

Video Transcript

JULIE HYMAN: Well, let's get back to markets right now and kind of merge the two big topics of the day-- the near records that we are seeing for the major averages, or records, in the case the S&P, as well as what's going on with the election and the convention. To talk about all of that, I want to bring in Jana Shoulders. She is Mariner Wealth Advisors managing director. And she is joining us from Tulsa, Oklahoma. Jana, thank you very much for joining us.

We have been talking a lot to folks about how to think about the election. And as you point out in your notes to us, Republican regimes are seen as being sort of more tax-friendly to the corporate world. But stocks actually tend to do better in recent history under a Democratic administration. So how are you thinking about the election and how to position?


JANA SHOULDERS: Thank you for having me, Julie. It's a pleasure to be with you this morning. It is true that we think of a Republican administration or regime being more business-friendly. But as you alluded, if you look back at history, that's not always been the case.

And to have a Democratic president does not mean that we won't have positive stock performance. As a matter of fact, if you look at how the market approaches going into an election, gridlock is favorable. Quite frankly, we tend to think that the market and investors are a little more comfortable if they think neither party could be a sweep, because then we're going to keep some either left or right-wing tendency policies from being prevalent.

And I think the other thing that I would point out is that while some of the Democratic platform may sound that it will be expensive or not friendly for business, I believe I understand that one of Biden's strong pushes is for infrastructure, and that maybe he is not as tariff-oriented. So that could put a little different twist.

ADAM SHAPIRO: I realize that some of us can be a bit myopic and only want to look at the United States. But you point out 40% of the world's investments, you might want to be out-- look outside of our borders. But where? Emerging markets? The sleepy, old economies in Europe? Where is that?

JANA SHOULDERS: That's such a difficult prediction, because if you look at where resources and the young labor bases are, that's going to take you to the emerging markets. But what we also know is that the emerging market investing world relies on currency risk, political risk, and so much that makes the average person a little uncomfortable that it's no wonder on that performance chart, you see it from up 85% percent in a plus year to down 50%. So I think it's one that you want to be very cautious and you want to assume that that should be your long-term money, that you have to be very patient with very wide swings.

And then as far as the developed international world, I think there are still pockets in places that one can be comfortable. They've historically had higher-dividend-paying stocks in foreign countries, and especially in our-- in the Europe environment. So if one is focused on income, that can be a bit of a driver. And one should not ignore investing in that, roughly 45% percent of our global market.

MELODY HAHM: You've called the US the cleanest dirty shirt in the laundry hamper. But when you think about the way that we've handled the coronavirus pandemic, it has been pretty abysmal. I would probably rank us near last when it comes to early action, proactive measures to really curb this virus.

When you look at those emerging markets you just mentioned, many of them are probably on the same path as us, when it comes to not having the resources in their cases. Do you take any concern there? Is that factoring into your equation when do you think about investability for any of these countries going forward?

JANA SHOULDERS: Oh, absolutely. And I think everyone is poised for some of the countries-- Brazil, other areas-- for the corona 19 impact to be later, longer, and worse. And it's going to depend on global health, not just what they can muster in their country. So I do think that one wants to be selective about emerging market investing, because I, personally, wouldn't be comfortable with an index at this point, because not all of those countries are going to be impacted the same.

And as far as the comment about US being the cleanest dirty shirt, I will have to say for all our challenges, we still seem to be the safe haven where people want to put their money in times of uncertainty in our treasuries.

ADAM SHAPIRO: And the other thing you said in regards to treasuries, when you're talking about the currency problems that might be headwinds for companies-- we saw it, for instance, with Walmart's earnings. Would have been even better-- they surprised everybody-- but it was currency headwinds. But given the fact that I'm looking at gold right now-- and if you talk about currency headwinds, you can watch gold for a bit. It's off the highs.

But what kind of impact are the currency problems going to have going forward? We're not going to see any strengthening of the US dollar in the next year or two, or are we?

JANA SHOULDERS: That's a good question. I wish I had a crystal ball. I'd probably be off on some Caribbean island and unavailable for comment right now. I don't know that we're going to see the US dollar replaced as the comfort zone.

But I do think they're going to face headwinds. I mean, when you look at how lower, longer interest rates mantra has come across from our Feds, I don't think anybody's looking to make money from our dollar. And I also think that it will be a challenge for the export-import imbalances, as they look at how that relates to other currencies.

JULIE HYMAN: Jana, it's a pleasure having you. Thanks for joining us. And please come back and visit us again. Janet Shoulders is Mariner Wealth Advisors managing director. Appreciate it.