Wealth CIOs hold allocations steady after midterm elections

Heads of investment at wealth management firms are holding allocation strategies steady after last week's midterm elections, according to WealthManagement.com, welcoming a divided government they expect will be unable to pass major legislation.

Doug Huber, CIO at Wealth Enhancement, a Minneapolis RIA overseeing about $160 billion, said economic growth, corporate earnings, inflation, interest rates and valuations drive markets. Elections can influence each of those, but they rarely replace them as the primary drivers of returns, he said.

For advisors, none of the allocation views described involves an election-driven change, and the guidance is the same diversification and resilience framing as before the vote.

Nick Holuta, senior vice president, investments and portfolio manager at Dynasty Financial Partners, a St. Petersburg, Fla.-based support platform for RIAs, said such moves are hard to time and that risk management around portfolios matters because correlations tend to rise during selloffs.

Jeffrey S. Neumeyer, principal partner and CIO at OpenArc Corporate Advisory, a roughly $130 billion Atlanta-based breakaway RIA, said he is watching fiscal negotiations, tariffs, taxes and regulation. He wants to see what actually gets done before changing an investment view. He raised one open question: whether uncertainty about the next tax and regulatory regime pulls some investment and M&A forward rather than slowing it.