Page 35 - Kiplinger's Personal Finance - November 2018

AHEAD

TOPIC A scenario, to which UBS
WHAT THE MIDTERMS MEAN TO YOU assigns the highest proba-
bility (60%), expect some
Regardless of the results of the election, putting an end to the gridlock when it comes to
passing legislation but con-
uncertainty is likely to be a plus for your portfolio. BY ANNE KATES SMITH tinued deregulation by
means of executive action,
as well as further use of
tariffs to pressure trading
AS AMERICANS HEAD TO THE ahead. “There’s so much in the House of Represen- partners. Democratic con-
polls this month, it’s proba- focus on the midterms tatives and four seats in trol of key House commit-
bly safe to say that the out- because of the polarized the Senate, according to tees means the potential
come of the 2018 midterm nature of the electorate,” UBS. The Democrats need launch of investigations
elections will be among the says Mike Ryan, chief in- to flip 23 Republican seats against the Trump adminis-
most closely watched in vestment officer for the to gain control of the House— tration that could roil mar-
memory. But, politics aside, Americas at UBS Global and they’re likely to gain kets from time to time. The
what should investors be Wealth Management. “Elec- a modest majority there, bigger risk for investors is
on the lookout for? tions matter, but they’re not predict UBS and other po- if mild gridlock turns into
If history is a guide, Amer- the only thing and not the litical handicappers. The extreme gridlock. The cur-
icans can expect a power most important thing” for Senate, however, will likely rent government spending
shift in Congress. But his- stocks, Ryan says. remain in Republican con- agreement expires in Sep-
tory also shows that whether Incumbent parties tend trol. Just nine GOP seats tember 2019, and Congress
your party is victorious or to lose ground in midterm are up for grabs, compared will need to act to avoid a
not, your portfolio is likely elections. Since 1910, the with 26 for Democrats and repeat of the fiscal-cliff
to survive the midterms un- party in the White House left-leaning Independents. stalemate that sent Stan-
scathed—and maybe a little has lost 31 seats, on average, In that divided-Congress dard & Poor’s 500-stock

ILLUSTRATION BY BRIAN STAUFFER 11/2018 KIPLINGER’S PERSONAL FINANCE 9

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