Midterm Elections: What Happened? Why? What's Next?

What Happened?

The Republicans had the worst election cycle since 1974. That was the aftermath of Watergate.

The GOP lost the House, the Senate, and several governorships. The loss of the Senate will affect judicial appointments for years to come.

Texas will have a Democrat senator, governor, lieutenant governor, attorney general, state senate, and state house. The Democrats even won 4 state Supreme Court justices, and land commissioner.

This is particularly damaging to the Republican Party. There is no path for a Republican to win the presidency without Texas.

Why?

The primary reason the Republicans lost so badly was that they were angry with Trump for starting a new war in Iran. He promised no new wars. The voters felt they were lied to. They also felt that Trump was not focused enough on affordability issues.

The majority of the electorite did not vote for Democrat positions like open borders, more spending, higher taxes, or no election integrity. The vote was a protest vote against the Iran war and the Senate not passing very popular issues like the Save Act.

For example, Democrats won several states that also passed laws or constitutional amendments that require ID to vote or only allow citizens to vote. Democrats voted consistently against requiring voter ID.

What's Next?

Gridlock. Democrats may control the House and Senate, but not a super majority to overcome a Trump veto.

Uncertainty: No one knows who will have control in 2 years

Volatility: Historically, the worst returns occur with a Republican president and Democrat House and Senate.

What about Investments?

The AI Bubble is showing serious signs of cracking.

Several tech leaders are down 20-30% from recent highs due to increasing debt to build AI infrastructure.

Yet, over half of the S&P500 is still trading at 10X revenues. This means a company would have to pay 100% of their revenue to investors over a 10-year period. This is unsustainable.

What to Do?

Diversify. Protect against downside risk.

Index (growth) Annuities and Index Universal Life provide:

1. Double digit potential annual returns on good market years with no losses on bad market years.
2. Grow your money safely, without market risk. Principle is guaranteed.
3. Once gains are locked in, they are guaranteed against market loss.

• If you own an annuity that is 2+ years old, new annuity returns are so superior, it is worth reviewing to increase future returns.
• If your annuity has an early surrender penalty, annuities are currently available that offer 20%+ bonuses with higher potential future returns.

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