The Bills

Ask Me Again on Nov. 9

Why so many Americans are putting off major financial decisions until this election is over.

Anxious businessman bracing for it

“It’s such a scary time in our history. Who knows what will happen?”

Image Source White/Thinkstock

Gregg Steiner is getting impatient. The Los Angeles entrepreneur wants to hire a few more people for Cabinet Garden, his indoor plant-growing system. He’d also like to invest in a social media campaign. Just one thing is stopping him: Donald Trump.

Lots of indoor gardening, of course, involves marijuana, as Steiner readily admits. And it’s more or less legal to keep up to six full-grown cannabis plants in a residence under California’s medical marijuana law. Californians will also vote this November on a proposal to legalize recreational use of marijuana in the state. But all this depends, in part, on the U.S. government continuing to look the other way, as the Obama administration is mostly doing, since marijuana is still a banned substance according to the feds. Steiner feels certain Hillary Clinton’s administration will do just that. But Donald Trump’s—who knows?

So instead of soliciting new clients for his business, which he founded earlier this year, Steiner has spent his days wondering how he would pivot should the worst happen. “I get resumes all the time. I’m ready to go fast and furious,” Steiner tells me. “God, I wish it was three weeks from now.”

Steiner’s precise dilemma might be unique, but he’s far from alone in his Trump-induced anxiety (a topic Slate’s Michelle Goldberg looked at extensively last month). In the more specific realm of large financial decisions, experts are seeing people put off major purchases, alter investment strategies, or punt on business decisions until they see what the world looks like after the election. As Mark DeCambre noted over at MarketWatch last week, stock-market volume is down sharply this month, something some observers are attributing to the uncertainty the election continues to engender. The problem is common enough that at the Garrett Planning Network, a national financial advisory service, they have a term for it: Trumpophobia.

For many of the investors and advisers I spoke with—many of whom, for one reason or another, have good reason to fear a Trump presidency—it doesn’t seem to matter that the race has tilted in the direction of a clear Clinton victory. They see Trump as a destabilizing force, and they won’t rest easy until after Election Day.

Stories like Steiner’s, of course, are by definition anecdotes. In a nation of more than 300 million, one can almost always find someone to illustrate almost any point. But when I went out seeking subjects for this piece, I didn’t exactly have a hard time finding them. And there is some data to back up this sense of pervasive anxiety. Earlier this month, a Gallup poll conducted for Wells Fargo discovered that more than 80 percent of those they surveyed “worried” at least some of the time about the election’s impact on financial markets. The fears seem to exist independent of overall economic stats, which are as good as they’ve been in years. A brisk pace of job creation is enticing men and women to rejoin the workforce, the stock market continues to trade near highs for the year, and the Case-Schiller Home Price Index is just below its previous record, set in 2006.

But investing—which is the correct term, whether we’re talking about the stock market, business spending, or the purchase of a home—always takes place in an information vacuum: No one can predict the future. For financial advisers, a certain amount of paralysis and indecision among clients is always a given. Especially after the Great Recession, folks worry about buying a home and then losing a job or seeing their investments disappear in the market. There is always at least one investing superstar telling people to look out below: Just this week, Jeff Gundlach, the CEO of DoubleLine Capital, predicted a “hurricane” in the bond market in the next few years. (He also predicted a Trump victory.) No surprise, a certain percentage of people, recovering house prices be damned, are still convinced the end is nigh. And elections likely compound that hesitation. Not only do large investments tend to decline in election years in most countries, according to a paper published in 2014 by Brandice Canes-Wrone and Christian Ponce de Leon of Princeton University, the finding is more pronounced in the developed nations they studied when the election is “highly competitive.”

This election may not presently qualify as highly competitive, but it is certainly remarkable. Trump has implied he might refuse to concede, suggested the possibility of massive voter fraud, and promised to deport millions. He’s threatened to roll back long-standing trade agreements and trafficked in conspiracy theories. A few months ago he predicted a “massive recession” is imminent and said he wouldn’t suggest investing in stocks now. None of this inspires confidence when you’re about to expose your finances to the world-financial headwinds.

Louis Barajas, a Los Angeles certified financial planner, says the election has profoundly shaken many of his mostly Latino clients. “The problem they have is that they believe this election has brought out the real feelings of most people in America.” The result? Barajas says he’s helped a number of clients adjust their portfolios to favor more seemingly liquid investments like bonds. I spoke with others who made a similar decision. Linda Jordan, an executive assistant living in the Bay Area, reduced the percentage of stocks in her portfolio late this past summer. A Democrat, she tells me her original plan was to go all cash if the polls indicated Trump would win. But even though they’re showing a likely Clinton win, she says she still won’t shift back to stock investments until 2017. “I want to see how things settle,” she says. “It’s such a scary time in our history. Who knows what will happen?”

Realtors report that at least some would-be clients are delaying purchases, which my colleague Henry Grabar wrote about in August. “I was working with a buyer who was looking to buy in Tribeca or SoHo, a loft with an outdoor space,” says Debra Ortega, a New York City real estate agent with Halstead Property. “Instead, he extended his current lease for six months, because of the elections. He is certain he would move out of the country if a certain person won the election.”

True, the housing market is slowing in high-cost areas such as Los Angeles and New York likely thanks in part to a federal crackdown on all-cash sales to buyers who hide their identities behind opaque corporate shelters, not to mention the high prices for what’s on offer, but it’s easy to find people in less pricey real estate markets who are on the sidelines, too.

Whitney Tillery—a blogger who also works in customer service at a lab-tech company in suburban Atlanta—saved for her down payment and got her credit report in order over the past few years so she could prequalify for a mortgage. She began looking to buy this spring, hoping to leave behind her one-bedroom apartment for a three-bedroom closer to her office. Then Trump won the Republican nomination. Tillery, a registered Democrat who flirted with the Green Party after Bernie Sanders’ defeat in the primary, hasn’t looked at a house for sale since. She says she’ll head to Canada and stay with family members living there if the real estate mogul is elected president. “Who wants to live in a country where you are scared that the person who is running the free world breeds misogyny and homophobia?” she says, adding she has little faith in Trump’s business skills, either. “Then on top of that, do you think he’ll bring the jobs back? His hats are made in China.”

Then again, plenty of folks aren’t above blaming the election for their woes—like Dunkin’ Brands’ Nigel Travis, who blamed “the overwhelming dampening effect of the presidential election” after Dunkin’ Donuts missed revenue projections in the most recent business quarter, joining representatives of Wendy’s, McDonald’s, Yum Brands (the parent of Pizza Hut and Taco Bell), Popeye’s, and BJ’s Restaurants, who are giving the same excuse. (In fact, the restaurant industry overall is doing just fine.) Executives at Barnes & Noble and the Gap are claiming the same thing too, even as they suffer from retail trends that have nothing to do with Clinton or Trump.

They’ll likely soon need to find a new excuse. As a paper published last week by Justin Wolfers and Eric Zitzewitz at the Brookings Institution demonstrated, stock market futures went up sharply and gold prices fell during the Clinton’s excellent performance during the first presidential debate. Some decided not to sell after all, like Jade Gooch, 20, a student at Hanover College in Indiana who wrote this in September:

Contacted this week, she says, “I haven’t pulled any of my money yet, mostly because I’m a young investor and still need to get a feel for the game. Also, I think I’ve become less fearful of a Trump victory in the last few weeks.”

And Virginia-based financial planner David O’Brien says one client recently called him up, and said, “I will write a big check for $100,000 and I want you to invest it now because once Hillary is elected the market is going to go nuts.” On the other hand, that was three weeks ago. O’Brien says he’s still waiting for the money to arrive.

Read more Slate coverage of the 2016 campaign.