Politics will play heavily into the evolution of the markets
Though this is no political blog and I’m not attempting to sway your vote to any particular candidate, it is important to highlight the advantages and disadvantages that each presidential candidate brings to the table. Obviously each candidate has an effect on the investing class, your vote as an investor may be more important than as the average citizen. Each candidate will have a profound impact on which stocks are hot, and simply the stocks that are not.
Obama’s tax policy should be carefully considered by investors. He’s proposing a tax hike directly on capital gains, and this is something that I’m sure he’ll carry to the White House. He’s taken a strong stance against speculation, especially that on the commodities markets primarily in the oil market. He’s proposing a capital gains tax hike of 33%, from 15% to 20%. This will certainly put more downward pressure on the markets, no investor likes to get squeezed by taxes and surely it will slow the amount of money that flows in and out of the markets. We might see some heavy sell offs if Obama becomes president, I’d much rather pay 15% on gains than 20%, and I doubt that that position is in the minority.
What Obama does bring to the table is more funding for clean energy, which has performed modestly over the past year. With oil ebbing, the solar and wind stocks did lose some value, but Obama’s urge to push clean energy into the mainstream will certainly fire up the alt energy sector. What’s good for him will be good for investors, you’re in for a great ride on alternative energy stocks under an Obama presidency.
McCain has stated that he will continue to cut taxes and work to push the Bush tax cuts for several more years. Though Obama has run on the ideas of balancing the budget through higher taxes while making investments in other areas, namely alternative energy and education. McCain will push for lower taxes, but has little to offer on cutting the budget except for removing the ability for congressional districts to earmark government dollars.
Though McCain won’t come out for any new tax hike, especially on capital gains, he’s going to have a tough time fixing the budget with earmarks. McCain’s policy brings more to the table for defense stocks, given his track record of war spending rather than social spending. A McCain presidency will likely be better for the stock market in general, but only because of Obama’s hike of capital gains taxes. McCain most likely won’t be able to solve the deficit problems with earmarks, so his presidency will likely come with even more inflation problems. Inflations fuels commodities, so pile on when the McCain ticket comes around. Alt energy for Obama, commodities and defense stocks with McCain.
