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Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 381
Experience:  Former IRS Revenue Agent
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My wife and I are very concerned about what happens when

Customer Question

My wife and I are very concerned about what happens when Donald Trump gets elected as president of the USA.
Specifically, we are worried about our investment in stocks, 401k, IRA etc.
My question is, where is the safest place to temporarily park our savings till this whole election is over?
We hear and believe that Trump will win this election and it will be our Brexit.
If that does happen, where's the best and safest place to move our investment to now?
Submitted: 2 months ago.
Category: Finance
Expert:  Dr. Fiona Chen replied 2 months ago.

Dear Customer,

In each 401(k), there is a money market type of fund. You can move your money to that fund for now. If the market goes low, that would be a chance for you to buy. Be positive, no matter what happens, for an active and informed investor, it is always an opportunity to invest. To know about this choice of money market type of fund can be useful. Use it often.

In your IRA account, depending on where you open the account and what choices you have, move the money to a similar type of cash fund can be a safe choice for now. Again, knowing how and when to move money to the cash type of funds is a way for active investment.

I told my clients to observe the behavior of their accounts at least weekly. If they need to go on vacation, or for a period of time, when they are not available for active observation, move money to the cash position even for that period of time.

Don't take money out of retirement accounts. That will have tax consequence.

Please feel free to follow up.

Regards,

Fiona

Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP

Customer: replied 2 months ago.
Thanks for the reply and the valuable information Ms Chen. I'll have to look into your advice. Is the money market in dollar denomination? If so, wouldn't it be devalued because after Brexit, I heard that the British pound was devalued.
Also, what's your opinion on Gold and Silver? How's about government bonds?
Which of these 4 (Money market, Gold, Silver or Gov Bonds) is less likely to depreciate in a Brexit like situation here if it were to happen?
Expert:  Dr. Fiona Chen replied 2 months ago.

Dear Customer,

The question you have is more of a sort of "long-term" perspective. And there are many websites discussing as such. I cannot discuss more or better. My advice for my clients in my own practice is more of the short-term perspective from an accountant and tax perspective. I will share with you for the discussion purpose of this website.

That is, you want to watch out for the trend and day to day development in the market to protect your retirement assets. We need to look at the trend in terms of what is happening today and this week.

Only in the larger investment portfolio, outside of the retirement accounts, the separation of various sources, as you are interested in looking at, makes sense in investment strategies. That is, if you are looking Brexit which will happen say in 2018, then you divide your retirement investments accordingly to various sources. In a way, if we get relaxed and don't look at our investment in between, we tend to miss out all the key development and changes in between. That strategy is not practical and not prudent for our little retirement accounts. However, if we have a lot of money to invest, we can afford to put some into some outlier investment alternative and put aside to let it ride, to grow or decline.

For the retirement accounts, the day we put it in, we already saved like 20% or higher federal tax and 10% California State income tax. That 30% of instant tax savings is an investment return rate no other alternative can bring to us. This is the advice I give to my client. As long as we don't loose the principal, we are doing pretty good in this IRA or retirement account contribution already. Even if the person purchases CD and keep in the CD, FDIC insured, in the IRA account, for three years, the savings (earning return) is 10% per year already, even if the CD pays like no interest rate on the principal deposit.

If the money market account is within your retirement account like 401(k) held by your employer, it is in the U.S. dollar denomination.

Regards,

Fiona

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