Skip the Midterm Noise—Think Like the Markets

Mike Townsend: With the midterm election now less than two weeks away, all the campaign noise, the endless advertisements, and the breathless speculation are nearly at an end. Voters will finally get their say on the battle to control the House of Representatives and the Senate.

I've started thinking about what the 120th Congress will look like when it convenes on January 3, 2027. Right now, both the Senate and the House of Representatives have narrow Republican majorities, but things could look very different in January. Democrats are heavily favored to win the majority in the House and have a realistic shot at capturing the Senate as well.

Already, more than 70 House members and 13 senators are either retiring or have lost their primaries. Dozens more incumbents could lose their races in November. Twenty to 25% of Congress members could be new when they convene in January.

But one of the most common questions I've been getting as I travel across the country talking to investors about the election and the potential outcomes is, "Will any of it really matter? Will anything really change?" Investors seem to increasingly question the relevance of Congress to the markets when the same problems—particularly around the budget deficit and the national debt—persist no matter who wins at the ballot box.

Welcome to WashingtonWise, a podcast for investors from Charles Schwab. I'm your host, Mike Townsend, and on this show, our goal is to cut through the noise and confusion of the nation's capital and help investors figure out what's really worth paying attention to.

Coming up in just a few minutes, I want to dive into some of the potential implications of the election on the markets and on key issues affecting the markets, particularly if, as looks increasingly likely, Democrats win one or both chambers of Congress. To help me dig into whether the outcome could really impact the markets, I'm going to be joined by Kasey McCurdy, chief portfolio strategist for Schwab Wealth Advisory™. Kasey is someone who thinks a lot about constructing portfolios in different policy, political, and market environments, so this is going to be a very timely discussion.

But before that conversation, here are three very brief updates on what's going on in Washington.

First, the president issued an executive order on October 16 exempting Russia from the bulk of the sanctions in the bill that just passed Congress a few weeks ago. The Russia sanctions bill was long championed by, and ultimately named for, the late Senator Lindsay Graham, the Republican from South Carolina who passed away unexpectedly in July. Less than a month later, the Senate passed the sanctions bill by an overwhelming 86-11 margin. It was designed to put sanctions on Russian officials, oligarchs, and financial institutions to choke off funding for the five-year-old war in Ukraine.

But the bill did contain a big loophole—it allows the president to waive the sanctions if he determined it was in the national interest. On October 16, the president did just that, and, as required by the law, he notified Congress that he was doing so in the national interest, though he did not explain why. The action came just two days before the law was set to go into effect.

Combined with the president's recent announcement that he had struck a deal with Russia to allow Russian diesel fuel into the global marketplace, the moves have put Republican lawmakers on the defensive on the campaign trail and sparked rare objections from some Republicans to the actions.

So far, however, the moves have had to have little impact on either the market or election polls, and it's unlikely either move will be able to materially lower high gas and diesel prices prior to the election anyway. But the practical and political implications of the president's actions could linger past the election.

Second, the president is renewing his efforts to fire Federal Reserve Governor Lisa Cook, announcing on October 9 that he had formed a "committee of inquiry" to consider whether to fire her over unproven allegations of mortgage fraud. The panel, which includes three administration officials, will hold the closed-door hearing on November 5, though Cook is scheduled to be in Europe for business meetings with the Fed's central bank counterparts. It's uncertain whether the hearing will be rescheduled.

It's the latest move in the president's attempt to fire Cook, which started in August of 2025. At issue is whether Cook misled lenders to obtain favorable terms on a mortgage application in 2021. Cook has never been charged with a crime, and she denies the allegations. Last summer, the Supreme Court ruled that the president could not fire Cook because he had not provided her with due process to respond to the allegations. The October 9 announcement seems to be his attempt to provide such a process. Cook's attorneys said they had "grave doubts" that the hearing was legitimate but that she "welcomes the opportunity to present the facts so that she can clear her name and demonstrate there's no legal basis to fire her."

The bottom line is that if the president attempts to fire Cook after the November 5 hearing, it's all but certain that she'll again challenge the firing, and it's reasonable to expect that challenge will eventually find its way back to the Supreme Court next year. At that point, the court, which ruled narrowly on the process question last summer, will likely have to rule on the much larger central bank independence issues that are at the heart of the president's desire to reshape the Fed's membership.

Finally, one notable update from the Social Security Administration, which last week announced that the cost-of-living adjustment for 2027 would be 3.6%. That's the largest increase since 2022 and 2023, which were outlier years because of the particularly high inflation in that period. And it's a bit of a bump up from last year's 2.8%. The Social Security cost of living increase is calculated based on the average of the main inflation indicator, the Consumer Price Index, in the third quarter of the year, as compared to the third quarter of the previous year. In addition, the Social Security Administration announced that the payroll tax would be applied to the first $192,300 in income next year, up from $184,500 in 2026.

Social Security is likely to be a big topic of discussion in the next Congress and in the 2028 presidential campaign, given the projection earlier this year that the trust fund would be unable to pay out full benefits starting in the fourth quarter of 2032 if Congress does not make changes to shore up the program. That timing is particularly meaningful because it will be in the term of the senators elected next month and in the term of whomever is elected to be the next president. While I don't expect changes to the program until after the 2028 election, the next couple of years should see policymakers at least begin laying the groundwork for what will potentially be a massive political battle over the future of the program in 2029.

On my deeper dive today, I want to take a closer look at the potential implications on key policy issues if Democrats win control of one or both chambers of Congress in the election. Democrats have begun building out plans for the first 100 days if they have the majorities. And many of those plans could have implications for companies, sectors, and the markets broadly. To help me explore the portfolio implications of some of these key issues, including the federal debt, artificial intelligence, cryptocurrency, healthcare, and more, I'm pleased to welcome back to the podcast Kasey McCurdy, Schwab Wealth Advisory's chief portfolio strategist. Kasey, who holds the Chartered Financial Analyst designation, has been with Schwab for more than 15 years in a variety of roles. Right now, he's responsible for leading Schwab Wealth Advisory's investment management philosophy and creating the standards for portfolio construction. Kasey, thanks so much for joining me today.

Kasey McCurdy: It's great to be back. Thanks for having me, Mike.

Mike Townsend: Well, Kasey, it's become something of a ritual in Washington that right before a big election, the party that's not in power starts issuing big plans for what it hopes to accomplish if it finds itself back in power. But there are also some issues that both parties know are coming, no matter what the outcome of the election is. And at the top of that list is the one issue that I hear about from investors more than any other, and that is the spiraling federal debt. With an annual budget deficit approaching $2 trillion, and the federal debt having crossed the $40 trillion milestone in August, investors are increasingly worried about the impact that will have on the economy and the markets. And we know this issue will be front and center for the next Congress because of the debt ceiling. The current debt ceiling, which is the cap set by Congress on the total amount the United States can accumulate, was set at $41.4 trillion as part of last year's One Big Beautiful Bill. And economists estimate that we'll hit that ceiling by mid-2027.

So this new Congress that we elect in November will have to raise it. Failing to do so would risk an unprecedented default, and the market reaction to that would, well, let's just say it wouldn't be good. In the last episode, I asked Collin Martin about the impact of the debt situation on the bond market. And his answer probably surprised some listeners. Collin said that he didn't think that our fiscal situation has been a key driver of higher yields lately. So taking a broader portfolio view, how are you thinking about the risks as the debt and deficit continue to climb? How do you distinguish those longer-term concerns from the near-term uncertainty around a looming debt ceiling battle?

Kasey McCurdy: Currently there's two clocks that are running. We're dealing with the debt ceiling; that's the deadline that's on the calendar. but we also have this fiscal path that is concerning. And you acknowledged, and many are calling out this $40 trillion number as a real focus. But the thing that I want to try to remind people is that it's really about the broader budget and the long-term changes that we see in interest costs, in deficits, and then the relationship between the borrowing and economic growth.

So while the $40 trillion number gets the attention, the ongoing carrying cost, or the interest cost from the government, is the part that really matters. And for us within Schwab Center for Financial Research, there's no real magic debt level that automatically triggers a crisis. So I would watch the interest bill but be conscious that the government has room to respond if they can continue this growth rate. And that's the real primary focus. If we continue to grow, and grow at an elevated level, we can maintain this interest cost. But if it comes to your portfolio, I think that's going to be something that folks should focus more on their own exposures. So be conscious about your bond duration. Make sure that you're diversified. Right now, we're trying to encourage folks to think below the benchmark duration, which tends to be about five to six years. But a portfolio that is focused only on that debt crisis, it actually has other risks that may not be so obvious. And that's something that is more about the long-term timeline; that's something that stretches for many years. We want to be conscious about what we're owning in the portfolio.

Mike Townsend: The thing that investors need to remember about the debt ceiling in particular is that it's purely a debate about increasing the amount of debt that the U.S. can accumulate. It's not at all about trying to get the debt under control or lowering that $40 trillion number. The real issue, as you point out, is the interest on the debt. Just servicing the debt is now the second largest expenditure of the federal government, and that really restricts the ability of the economy to grow.

Raising the debt ceiling next year will require Democrats, if they have the majority in one or both chambers, to forge a compromise with President Trump, who ultimately has to sign any agreement into law. And that is likely to be very, very complicated. Well, Kasey, you mentioned one of the other big pieces of the puzzle right now, and that is the interest rate environment. The Fed began what we anticipate will be a hiking cycle in September, and the market seems to be expecting another rate hike before the end of the year.

That increases borrowing costs for companies and could also draw capital away from equities toward higher yielding bonds. So how does this interest rate backdrop affect the balance of risks and opportunities across stocks, bonds, and cash from your perspective?

Kasey McCurdy: Well, higher rates, they raise the hurdle for every asset. So a stock, it needs to have the earnings growth that supports that higher cost of capital. You have a corporate project; it needs to have a better expected return. And then cash and bonds, they suddenly become more competitive with those other assets.

So an important thing to keep in mind is that the reason for higher rates is what's going to shape the result. And think about the growth that is currently supporting earnings alongside those higher yields. But we've also seen the broadening of inflation and then the faster tightening that has to come from the Federal Reserve impact those bond yields higher. And so a better starting yield can certainly help with future returns. Again, as always, barring default, but longer duration is going to remain exposed if we continue to see those long-term rates move higher.

And so while longer duration, it's still at a risk, if rates move higher, you at least are going to be earning the yield that you're starting with. Now, when it comes to your portfolio, I'm going to keep coming back to this. Make sure that you have those stocks so that you can participate in the long-term growth. But quality bonds are where you're going to find the income and the diversification. Meanwhile, the cash that we always have in our portfolio, that is very much focused on the near-term needs.

And so long-term money that is being pushed into cash because you're seeing those more attractive yields, just be conscious that you still are going to be facing the inflation risk, the reinvestment risk, as well as the purchasing power risk that comes with owning cash beyond just your near-term needs.

Mike Townsend: Let's shift back to Capitol Hill. And one of the areas where you could potentially see a sharp divide between a Democrat-controlled Congress and the president is artificial intelligence, or what the president prefers to call superintelligence. I'm going to just use AI for simplicity's sake in this conversation. Spending on AI has increased markedly with this administration. Instead of government mandates, President Trump has said the industry should self-police.

But with the recent breaches, the White House announced the formation of the Superintelligence Task Force. And the task force issued a requirement that AI labs automatically and immediately disclose security breaches, rogue behaviors, unauthorized model actions. They have to disclose that to the government. And there's also a requirement for them to take immediate and decisive action to fix issues, repair damage, provide remediation to affected parties.

That's a pretty significant policy shift, and one that frankly Democrats are likely to pretty much embrace. In anticipation of a potential win in the midterms, Democrats are laying out a framework for their approach to AI technology, including safety principles and liability guidance. So how should investors think about the potential for stricter guidelines, especially around who's responsible for the costs incurred when an AI system goes rogue or fails?

What could that mean for the cost and profitability assumptions behind AI investments?

Kasey McCurdy: We often talk about productivity as this gross value, but at the end of the day, it is very much focused on the net productivity. And to your point, some of those costs start to show up. And so the benefit needs to be measured after you include all of the different components that go into it. So that may be the testing, the security, the human review, which is a very costly process, the ongoing compliance—you go through the list, and there's a lot that goes into the difference between gross productivity and net productivity. The one example that I like to call out is around customer service. You can have an AI tool that can answer twice as many requests, but if you have employees that have to look over all of the outputs of that process, you run the risk of not exactly benefiting on a net productivity.

Because now you're paying those employees to review the output before it actually shows up for the end user. That is a very important factor to incorporate. I always comes back to the cash flow question. You're going to see this coming through in the revenue, but we need to be conscious about the recurring operating cost and the return that you're actually getting for the amount of capital that is being invested. So when expectations are as high as they are currently, it's very important to continue these good outcomes because even if you are exceeding your own growth rate, you may not be meeting the very elevated expectations, which is kind of where we're sitting right now with this earning cycle so far. Earnings have been coming in strong to start, but we still have high expectations. So we're really just meeting those expectations thus far. That's the focus that I would put on the productivity question.

Mike Townsend: Well, there are substantial expectations for AI's contributions to productivity and economic growth. So how should investors distinguish those potential economic benefits from the returns they might earn on AI investments? Can the build out benefit the broader economy without every investment paying off? And what are the risks?

Kasey McCurdy: Absolutely. I think a good example is going back twenty-five years. What I'll say is that the internet survived the internet bubble. All of the networks and the business models, they kept developing, even after those stocks collapsed. And so we had useful technology at the same time as seeing disappointing investments. Those two things can coexist. And in the event that the AI build-out is also seeing that same possibility.

Be conscious of that process because technology, that can build a very valuable road without every company earning the return that you may expect. It's important to try to think beyond just any individual holding, but still be aware that if you can diversify, you get to participate alongside that economic growth. The diversification of equities is very important. Make sure that you're including not only the hyperscalers that we often hear about, but those that benefit from the build out. So it may be the developers, the infrastructure, as well as the adopters that are farther down the road. This is going to be a time more than ever that I'm going to keep pointing people back to the tried-and-true method of diversification. Because if you try to pick the winner, the market is rotating so quickly right now that you can very quickly get offsides.

Mike Townsend: Well, Kasey, another fascinating political aspect to the AI story is the public backlash that's happened over the last year or so to data centers, the massive buildings that house the computer servers and equipment that are powering the AI expansion. Polls are now consistently showing huge public concern around these data centers.

And particularly their impact on the environment and the cost of electricity and water in nearby communities. It's all putting the hyperscalers in a bit of a bind. They need these data centers. They frankly can't build them fast enough. There are something like 2,000 in the queue to be built around the country. But the not-in-my backyard crowd, very vocal right now. So if power or water or permitting constraints make it harder to build these facilities, what could that mean for the pace and cost of the AI build-out? What would you watch for as a sign that maybe growth expectations need to be reassessed?

Kasey McCurdy: I think this is one of those places where you could see these delays start to show up in your earnings. And the risk is that we've committed capital to the build-out. If we don't see these facilities start to generate revenue, you run the risk of not seeing the return on investment that everyone is looking for. This is one of those other examples of a longer wait period where you have the potential for higher power cost, more expensive financing, it all just reduces the return that we're expecting from this build-out. So markets, they can value an announcement today, but that earnings are going to require that that power connection, they're going to require a completed facility and eventually a paying customer. I would focus very much on the connection, focus on some of the opening dates, making sure that you're seeing this utilization come through and the revenues show up from the new capacity. But if we continue to see these repeated delays, it's certainly a risk of weaker revenue as we carry this out. But the point that I would call back—I'm always going to keep bringing things back for our investors—make sure that you are leaving room for that adaptation. I think this is something that a lot of folks may overlook, mainly because we always tend to talk about the constraints up front. We see those risks front and center; they show up in the headline.

But we don't always see the changes that happen to make sure that we can address the demand in the market. And you'll see this in changes in resources—you'll see this in changes in technology. Innovation right now is touching every single part of our economy more than it ever has before. And when you are in that innovative period, you need to make sure that you're participating alongside that adaptation rather than trying to completely avoid those exposures.

Mike Townsend: Kasey, as you know very well, AI stocks are in so many ETFs and mutual funds that most of us actually have them in our portfolios, even if we've never bought those equities outright. And it seems natural that investors are wondering about fallout from potential political changes. So how can investors assess the AI exposure they already have across their funds and individual holdings? And what would warrant rebalancing rather than reacting to political headlines?

Kasey McCurdy: First, we need to know what we own. So start by opening up your portfolio and looking across the different holdings. Right now, as you pointed out, we certainly see risks across similar positions in different named funds. So example—you can see a broad index right now having a lot of the similar exposures to a growth fund or a technology fund. And so we want to first think about what are our exposures? You can do that on the individual stock level.

At Schwab, we have tools that we can look at this from a risk factor perspective. And so you can see exposures that are aligned to similar risks rather than just the name of the business. Both are very useful ways of comparing your portfolio. But make sure that you expand beyond just your own holdings. For us, we're going to think about the whole household. So that may include things beyond the portfolio here at Schwab—things like employer shares or other outside accounts. You really need to think about your total household. And the thing that I think everyone is focused on right now is that while there may be different sectors associated with this AI build-out—so we have the chipmakers, and there's the cloud platforms, and you've got utilities and infrastructure—that doesn't mean that you may not still be at risk for the same cycle. Trying to be conscious about the implications from any one change in a single company may have some downstream effects. And I think that's a lot of focus for investors right now around AI.

But the best thing to do in that regard is to make sure that you are properly allocating a portfolio. I like to say that you can be right and still sell. If you have too much exposure to a company that you really believe in, that is still having too big of an impact on your future.

Make sure that we're rebalancing at the broad asset class level. Make sure that you're thinking about your positions at the individual fund, ETF, or single stock level. As for headlines, I think they're useful if you want to use it as a way to consider what you own. Just make sure that the changes that you're making in the portfolio are useful for you, not just to address whatever headline came across the phone or your computer.

Mike Townsend: Kasey, elections obviously can cause a lot of concern or excitement depending on how your particular choices fare. And there's usually plenty of discussion on both sides about what's going to happen. But once everything settles down, changes typically are not so dramatic. So what I'd like to do is just do get some quick hits on some other issues. I could talk about this AI topic for the entire podcast, but I do want to hit some other issues that are getting a lot of airtime and discuss what investors should consider. So I want to start with healthcare, because with the potential for a Democrat-controlled Congress, I think there'll be a lot of scrutiny on the administration's healthcare policies, and that could of course have repercussions for industries that those policies affect. There are things like Most Favored Nation and pharmaceutical agreements, there's private equity investment in the healthcare space, insurer practices, so a lot of moving parts here.

We could see Democrats really dive into some of these issues. The roots on some of these things are very deep and have a broad impact. So how do you distinguish policy scrutiny that maybe creates headlines from changes that could meaningfully affect the investment case for healthcare?

Kasey McCurdy: We always want to try to build the bridge from the Washington discussion all the way to the actual cash flow that businesses are returning. So there's a few questions that I think are useful. One, let's be conscious of the headline or the topic that you're hearing about—is it something that is just posing scrutiny towards an existing policy? Is it an actual proposal? And then the real question is actually something that could show up as an implemented policy.

Once you've made that decision, now let's think about which business model is actually exposed. Because you can think about healthcare as a broad collection of businesses. It's not one specific industry. There's a lot of different companies that can be exposed to those policies. From there, what is the impact? How large is the revenue or cost effect from the change that is being proposed? And while it may have a big headline, it may not have the same implication at the cash flow or earnings level. And then last of all is the change that is being talked about already reflected in expectations. And this is the real challenge that I try to pose to folks, is as you're thinking through these type of risks, what information do you have that the market doesn't currently have that that you're trying to change your portfolio about? So be conscious of what is already in prices and what is already in expectations. And then the other thing, too, is for us, we're going to be thinking more macro-oriented when it comes to the healthcare sector. Be conscious that there's individual stock implications. But at a macro level, a lot of innovation in healthcare is really benefiting this sector. We're also seeing the demographic changes that are going on that have increased in demand. There's efficiencies that are coming through. And then you just get the broader themes that can have ongoing effects. I think GLP-1 is one of those treatments that has so many knock-on effects that are affecting many different businesses. There are things that we see value in in the healthcare space. And this year has actually done quite well since the middle of the year. So healthcare right now for us is what we would refer to as a more-favored sector. But again, even as we think about the sector, make sure you're conscious of what are the underlying companies and their impacts from these different policy changes.

Mike Townsend: Yeah, Kasey, I think it's a really important point you make that there's a big difference between sort of the rhetoric around Washington. And I try to point out to investors all the time that, for example, simply introducing a bill on Capitol Hill, well, there are 10,000 bills introduced in every Congress, and only a tiny fraction of them ever move forward. So it might generate a headline from your local congressman that he's introduced something. But that's a long, long way from actually becoming policy. And I think healthcare in particular is one of the areas where there's sort of an overreaction to the potential for change from Capitol Hill.

Another topic I wanted to hit—tariffs. That's definitely something that Democrats, I think, would like to reel those in. We also have big court challenges pending. And of course, the last time we had a court challenge, it resulted in about $140 billion in refunds to companies.

Many companies, I expect, would welcome a rollback of tariffs, whether it's through the courts or through a change in policy. But how should investors think about the effects of changing tariffs on company earnings and also on inflation?

Kasey McCurdy: Let's take it back to last year and just kind of walk through what a tariff actually means. So a tariff cost, there's three basic places that it can go. It can increase a company's cost, which reduces their margin, it can increase the customer's bill, or it can influence the supply chain. And so companies can absorb those costs, they can choose to pass it through in prices at higher levels, or they can change suppliers and products. So the mix is really going to determine the implications for earnings and potentially the inflation effects. For the current situation, it's effectively just run that logic in reverse. And so now it's up to the company that can choose to either retain those tariff refunds as a savings. They can lower prices—we haven't seen a lot of that across the board—or they can choose to reinvest it.

And an importer, they may still be selling higher cost inventory before that cheaper shipment arrives. So this impact can really have a delayed effect over time. But I would make sure that you be conscious about separating what is a refund from recurring earnings, because a one-time benefit is one time, while the earnings of the business is what we want to be focused on because we're investing beyond just this one-time event.

Mike Townsend: One other topic I wanted to hit was cryptocurrency. Crypto industry was hoping to get some guidelines in place with the Clarity Act. And unfortunately, from their perspective, that vote failed, but then Bitcoin went up after the vote failed. How should investors distinguish developments and crypto regulation from the investment case itself? There are a lot of politics at play here, but I do think there is genuine bipartisan interest in putting some rules of the road in place for the crypto industry. So what potentially would be the impact down the road.

Kasey McCurdy: Rules of the road are important, especially in these emerging type of asset classes. So it just makes it easier for everyone to navigate. We see industries be able to incorporate the crypto assets more than they are today. And so while we saw that that failure, there's been other organizations that have stepped up to try to offer some additional guidance around how to think about cryptocurrencies. My reaction to some of the recent events is just to highlight the fact that there's clearly a desire to increase usage, increase access, make sure that there are very clear rules of the road, but how we get there just may be a bit choppy. With these price changes that happen with reactions to events, I would be less focused on that and try to focus more on the bigger picture and the story of seeing these long-term trends moving towards more of these digital assets. At Schwab, we have more exposure now than we've had before. We offer this to our clients. I will say that on the portfolio side, we're not incorporating cryptocurrency as a strategic long-term holding in all of our portfolios, but we want to make sure we help our clients understand the impact. Because in this space, we've seen so much volatility as this market becomes a more established player, that you need to be conscious that even a very small allocation can greatly increase the volatility in your portfolio. And so things like that is what we want to make sure we're talking about with our clients. but there's likely going to be more and more of this as we just work towards an established asset class.

Mike Townsend: Kasey, really appreciate all your thoughts, and we'll obviously see how things play out on Election Night and frankly whether we end up having to really focus on some of these issues or not, depending on the outcome. But before I let you go, always like to tap into your insights and Schwab's approach on what we should be thinking about right now as we gear up for the post-election months. One of the things I've been pointing out to investors is that the market has a very good track record of responding positively to the election simply being over, regardless of the outcome. Elections are a big source of uncertainty, but once that uncertainty is in the rearview mirror, the market historically has tended to respond positively. So regardless of whether we get a post-election rally this time or not, what should investors review in their portfolios as they look toward 2027?

Kasey McCurdy: I'm gonna hit you with three big ones. So first, what does your portfolio need to fund? Make sure you're reviewing your spending and your retirement timing, any sort of family commitments that you have. Make sure that you have the assets that that can actually fund those needs. So that's front and center.

The second, the market has had quite a bit of success recently. So be conscious of what potential risks may not be intended in your portfolio. Often, I'm talking to clients about the concentration in individual stocks, some of their embedded gains, we talk about bond duration. We want to make sure that the cash flows are helping to rebalance, and we're thinking about tax-aware changes, things that, again, I'm always going to lean back to, professionals here at Schwab that can help you work through. So that's second. Be conscious of what the market has created in your portfolio that you may not be aware of.

The last one, I'm always going to come back to this. I've told folks that I'm on a crusade against headlines. Be very conscious about what is forcing you to change. Be thoughtful about your reviews. Make sure that it is a well-explained decision of everything that is changing in your portfolio. I'll leave you with this because there's so many headlines out there, it very much encourages people to make changes. Please do not let a 20-second headline derail a 20-year plan. Be focused on your own needs more so than what the news or social media is telling you.

Mike Townsend: Yeah, and obviously that's a really important, I think, around elections in particular. I mean, this election will have come and gone before we know it. The new Congress is going to be with us for two years making policy. So I think this is a really timely discussion, but elections can kind of spark overreaction in investors, as you point out. And I think it's really important to remember to not let that happen, whether what you want to happen in the election happens or not.

Kasey, really appreciate your perspective. This has been a great conversation. Thanks for joining me.

Kasey McCurdy: Thanks for having me, Mike.

Mike Townsend: That's Kasey McCurdy, chief portfolio strategist for Schwab Wealth Advisory. You can follow his commentary on schwab.com/learn.

Well, that's all for this week's episode of WashingtonWise. We're going to switch up our usual cadence for the next episode because it would normally fall during election week. Instead, we're going to push it back by a week so that we'll have time to discuss the implications of the election outcome for investors. That next episode will be available on November 12. So take a moment now to follow the show in your listening app so you get an alert when that episode drops and you don't miss any future episodes. And don't forget to leave us a rating or a review—those really help new listeners discover the show.   

For important disclosures, see the show notes or schwab.com/WashingtonWise, where you can also find a transcript.   

I'm Mike Townsend, and this has been WashingtonWise, a podcast for investors. Wherever you are, stay safe, stay healthy, and keep investing wisely.