Sustained bull market

“If the surge in major indices following the Presidential election is any indicator, we may be in for a sustained bull market. We saw new all-time highs in the weeks before the election, and the momentum appears to be continuing. This could encourage more employees to invest in their companies' retirement plans and prompt employers to support these contributions. President-elect Trump has advocated for tax cuts, which may incentivize investment from the top down, potentially benefiting corporations and their employees.
 
“So far, the short-term effects of Trump’s victory appear to have positively impacted the stock market. This may not be so much a partisan celebration as it is a relief from the uncertainty that markets typically dislike. Another common belief is that markets generally 'like gridlock.' With the Senate turning red, Wall Street might even root for the House to flip blue. We’ll need to wait and see if the current setup in Congress will streamline the process of confirming new cabinet picks. It seems that Chair Powell and the Federal Reserve are determined not to let politics influence the upcoming rate decision. Individual stocks like DJT and TSLA have risen for clear reasons.

"However, once the initial effects of the Trump/Vance victory are absorbed, Mark Cuban’s congratulatory post may reflect the broader sentiment among other business leaders: that, as a nation and an economy, we should work together for the greater good.” – Stephen Callahan, Trading Behavior Analyst at Firstrade

More savings among lower, medium income workers

“One bright spot [in 2025] is that we should see a strong increase in retirement savings, especially among lower and median income workers.

“This increase is driven by two key policy changes: First, more state retirement mandates are coming into effect in 2025. For example, California will require even smaller employers with 1-4 workers to enroll them in either the state’s auto-IRA or an employer-sponsored retirement plan by the end of the year. The second is a requirement that all new 401(k) plans be auto-enrollment, so employees will only have the ability to opt-out since they will be automatically enrolled in the plan.

“These two changes should drastically improve participation rates. Past Gusto data has shown these mandates have a hugely positive impact on workers’ savings – so we expect that trend to continue throughout 2025.” – Julia Miller, GM + Head of Product, Benefits, Gusto
 

New policies could present uncertainty and opportunity

“One is that tax laws are changing.  The current provisions of the Tax Cut and Jobs Act are set to sunset at the end of 2025, so that could be the change, but there is also a strong possibility that the new administration works with Congress to make some or all of these provisions permanent or adds additional provisions.  Whenever things like tax law are evolving it presents both uncertainty and opportunity.
 
“We have fielded a lot of questions from clients about how different policies – like tariffs – will affect their portfolios.  Our insights are forward looking, focusing on what we can control, like diversification, rebalancing, and costs (including taxes), and trying to push away what we are unable to control, like economic uncertainty, politics, and other very catchy items for the media but not helpful items for portfolio management.

Related: 401(k)s under a Trump presidency: Could new policies usher in a new era in retirement plans?

New laws, increased portability