Tuesday, July 1, 2008
Money. Getting it and keeping it. There are many and diverse factors that affect the stock market, but the trend around presidential elections is pretty consistent. It's a maxim that the stock market hates uncertainty. That uncertainty feeds the bears going into most elections and usually gives way to comfort and a rising market when the election is concluded. For the investor, then, it's a matter of figuring out who the winning politician will be and how that may affect investment choices. Need some help? In today's NYT, David Brooks thoughtfully asserts that "rising economic sectors tend to favor Democrats while declining economic sectors are more likely to favor Republicans. The Democratic Party (not just Obama) has huge fund-raising advantages among people who work in electronics, communications, law and the catchall category of finance, insurance and real estate. Republicans have the advantage in agribusiness, oil and gas and transportation." As the outcome of the election gains certainty, and then traction, the market will tend to rise and the economic sectors supporting the winner will tend to prosper.
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