Key Takeaways
- Whether you’re happy or disappointed with the election results, your financial decisions should be based on facts rather than political reactions.
- Recent stock market volatility demonstrates how quickly investor sentiment can change and why long-term financial plans shouldn’t depend on short-term market movements.
- Interest rates, patient spending, and practice profitability may have a more direct impact on dentists than election headlines.
- Proposed tax policies aren’t law. Practice owners should focus on existing tax rules and planning opportunities while monitoring potential changes.
- Maintaining healthy cash flow and evaluating investments carefully can help practices navigate economic uncertainty.
The 2026 midterm elections are behind us, and depending on your political views, you may be celebrating the results, disappointed by them, or simply relieved that the campaigning is over. Whatever your reaction, there’s an important distinction between how you feel about an election and how you should respond financially.
For dental practice owners, political developments can influence taxes, interest rates, the economy, and patient confidence. But making significant business or investment decisions based on election results alone can be costly. The better approach is to understand what has actually changed, what might change, and what those developments mean for your particular practice.
The Stock Market Doesn’t Always React the Way You Expect
The days following the November 3 election offered a good example of why predicting market reactions is difficult.
Stocks initially rallied after the results, but technology shares subsequently experienced a sharp selloff amid concerns about potential regulation of artificial intelligence and the enormous investments being made in AI infrastructure. The S&P 500 finished election week down approximately 2.7%.
Then, on November 9, stocks rebounded sharply. The S&P 500 gained 2.3%, while the Nasdaq rose 2.7%, helped in part by falling oil prices and easing inflation concerns.
The point isn’t that elections don’t influence markets. They certainly can. But corporate earnings, inflation, interest rates, geopolitical developments, and investor expectations are also significant factors.
Consider a dentist who is 10 years from retirement and has accumulated substantial savings in a retirement account. Moving those investments into cash because of an unfavorable election result could mean missing a market recovery. Conversely, becoming overly aggressive because your preferred candidates won could expose those savings to unnecessary risk.
Neither approach substitutes for a long-term investment strategy based on your financial goals and tolerance for risk.
What Could Actually Affect Your Dental Practice?
While stock market movements attract headlines, other economic developments may have a more immediate impact on your business.
Interest rates are one example. If you’re considering purchasing another practice, expanding your office, or financing new equipment, borrowing costs directly affect monthly payments and cash flow.
Suppose you’re evaluating a $500,000 equipment and office expansion project. A one-percentage-point difference in the interest rate on a seven-year loan could change your annual debt payments by roughly $3,000. That may not determine whether the project moves forward, but it’s one factor in assessing affordability and expected returns.
Patient spending is another consideration. Economic uncertainty can cause some patients to postpone elective procedures or larger treatment plans requiring significant out-of-pocket payments.
Rather than assuming national economic trends will affect your practice in a particular way, monitor your own numbers. Changes in treatment acceptance, cancellations, collections, and accounts receivable can reveal emerging issues before they become serious financial problems.
Don’t Confuse Political Promises With Tax Law
Taxes are often a major focus during election campaigns, but proposed changes don’t automatically become law when the votes are counted. For dentists, that distinction is especially important as 2026 comes to a close.
You may be considering a significant equipment purchase, retirement contributions, or changes to owner compensation. Those decisions should be evaluated under the tax rules currently in effect, while remaining aware of potential legislative developments.
For example, Section 179 allows qualifying businesses to deduct eligible equipment costs, subject to certain limits. But purchasing a $150,000 imaging system solely to reduce your tax bill doesn’t necessarily make financial sense. The equipment should also improve productivity, patient care, or profitability enough to justify the investment.
The IRS has also announced inflation adjustments for 2027, including higher income tax bracket thresholds, standard deductions, and qualified business income deduction thresholds. Those are actual changes you can incorporate into next year’s planning.
Focus on What You Can Control
No one can definitively predict exactly how the economy, financial markets, or government policies will evolve over the coming year. But dental practice owners can make sure their businesses are prepared for different possibilities.
That means maintaining adequate cash reserves, understanding your debt obligations, monitoring profitability, and making investments based on realistic financial projections. It also means reviewing your personal financial plans alongside your practice finances. For many dentists, the practice represents a significant portion of their net worth, making diversification and retirement planning especially important.
Whether the election results gave you optimism or concern, the fundamentals of sound financial management haven’t changed. A healthy practice, thoughtful tax planning, and a long-term financial strategy will serve you better than reacting to political headlines.
Plan Ahead With Edwards & Associates
At Edwards & Associates, we help dental practice owners evaluate tax strategies, business investments, and financial decisions in the context of their broader goals. With year-end approaching, now is a good time to review your 2026 tax position and begin planning for 2027. Contact our team to discuss your options and make informed decisions about your practice’s financial future.
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