How Wall Street's 'Trump Trade' Could Drastically Change Your Retirement Plans in 2025

As Wall Street evaluates the impact of President Joe Biden’s decision to withdraw from the 2024 presidential race, investors are closely examining the implications of former President Donald Trump‘s potential return to the White House. The "Trump trade," a term coined by investors that refers to potential market changes under a Trump administration and how these shifts will affect the U.S. economy, could have major impacts on those facing retirement. 

Don't Miss:

• The average American couple has saved this much money for retirement — How do you compare?
• Can you guess how many retire with a $5,000,000 nest egg? – How does it compare to the average?

Anatole Kaletsky, co-founder and chief economist of investment advisory firm Gavekal, suggests that investors may need to reconsider their positions given the new dynamics of the electoral contest. “This logically necessary yet sensationally unpredictable event should mean a major reversal for the ‘Trump trades’ that have fascinated Wall Street analysts,” Kaletsky explained in a research note. With increased uncertainty persisting until the November 2024 election, market volatility could rise, impacting retirement portfolios.

Goldman Sachs analysts report that a Trump presidency would likely significantly change trade policies and tariffs. For instance, Trump's plan to impose universal tariffs on U.S. imports could benefit domestic companies but hurt global players. Shifts in tariffs can greatly impact stock prices – for better or worse – affecting retirement savings for those who have invested in international markets. 

Trending: Will the surge continue or decline on real estate prices? People are finding out about risk-free real estate investing that lets you cash out whenever you want.

Trump promises to end the "inflation nightmare," but economists warn that his policies surrounding tariffs and strict immigration measures could actually drive up prices. In that event, retirees on fixed incomes may struggle as their purchasing power dwindles. 

Goldman Sachs has stated that a Trump presidency could positively impact the consumer tech, consumer services, and energy sectors – particularly those focused on fossil fuel production. That could boost stock prices for companies like Exxon, potentially benefiting those with energy-focused retirement portfolios. 

A Trump administration could also mean reduced regulation, which might favor heavily regulated sectors such as banking and energy. While this could be positive for some stocks, it remains uncertain how this could impact the broader market. 

Trending: Collecting passive income from real estate just got a lot simpler. A new real estate fund backed by Jeff Bezos gives you instant access to a diversified portfolio of rental properties, and you only need $100 to get started.

As investors continue to weigh the shifting electoral odds, Trump's public statements continue to impact the financial markets. For example, his recent comments about increasing tariffs on China led to market turbulence. According to Peter Boockvar, chief investment officer of Bleakley Financial Group, another tariff battle could negatively impact the U.S. manufacturing sector, posing risks for retirees invested in manufacturing stocks.

Certain markets will be impacted no matter the election outcome. But staying informed and proactive can help retirees and Americans in general better prepare for the potential impacts the "Trump Trade" could have on their individual circumstances.

For more personalized advice about your unique financial situation, consulting a financial advisor can be an invaluable resource to ensure your financial strategies align with your long-term goals – particularly given the uncertainty surrounding the upcoming election. Talk to your advisor to better understand how political changes could affect your retirement plans and utilize their expertise to make more informed decisions. 

Read Next:

• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?
• How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.