how will obama affect the stock market.

Discussion in 'Economics' started by prc117f, Jun 4, 2008.

  1. prc117f


    With bush the war companies and big oil companies did pretty good.

    What kind of companies do you think will do well under obama?

    I am taking a wild guess but something like GE could do better? They never did too well since 2000

    What about tech stocks, maybe they will do well as well. Cisco going to 50? intel up there as well.

    but if Obama decides to tax dividends over the 15% maybe dividend stocks will do badly because of the taxation risk?
  2. The last issue of Forbes had an op/ed piece by Ken Fisher where he opined that Obama would be better for equity markets than McCain.

    I will try and link it if I can.

    Ken Fisher is a conservative, one of the most successful money managers of all time, and the fact he weighed in so forcefully on this issue in Forbes is interesting, to say the least.

    Remember all the fear about Bill Clinton and the markets?

    They did brilliantly well under Willy.

    I am not so certain there is an inherent link between the party affiliation of the person occupying the White House and the performance of equity markets, necessarily.

    Having said all that, I would prefer much smaller government rather than the same level or higher levels, all things being equal.

    There are few entities that know how to spend money more inefficiently than government.
  3. Bar and entertainment stocks should do well with all the people trying to drink their problems away.

    Accounting stocks as a result of needing to deduct anything you can to prevent it from being confiscated by the govt.

    Chinese stocks should do well as the progress to a free market economy at the same time we socialize america

    The big Bond houses in wall st should do well trying to find financing for all the govt debt that is going to be needed to ride this into the ground.

    bankruptcy related stocks should do well

    baby care needs like diapers formula etc... for all the welfare baby factories ramping up to full production to raise their household incomes.

    you can also make some extra cash and hedging your longs with some shorts

    Fast food and service industry companies will have a harder time when minimum wage goes up (gotta make sure that highly motivated 17yr old who cant give proper change without the aid of the register can raise a family working there)

    Its going to be a good time. higher taxes and higher costs to make sure that 'less than steller employees' behind the counters can make a 'living wage' regardless of their skills, abilities, or motivational levels.

    Q: Has the stock market been better, on average, when a Republican or Democrat has been in office? Do you have a chart that shows this?
    A: Many investors assume that Republican presidents are better for the stock market. That's not true.

    But before I get to the particulars, a disclaimer: This answer is not a political statement. By answering this question, I am merely conveying the cold, hard facts regarding stock price performance under both Republicans and Democrats. I endorse no political party and have no vested interest in the results.

    To get the answer to your question, I turned to the respected Stock Trader's Almanac by Yale and Jeffrey Hirsch. This book tracks and organizes historical facts about the stock market, and the 2005 edition addresses your question on page 42.

    Using the Dow Jones industrial average as the benchmark, Stock Trader's Almanac shows a $10,000 investment compounded during Democratic presidencies since 1901 would be worth $279,705 after 48 years. The same $10,000 investment during 56 Republican years would have been worth just $78,699. If you adjust for inflation, the value of a $10,000 investment under Democratic presidents is $33,426.The inflation-adjusted value under Republican presidents is $26,145.

    Many factors affect these results besides the president's party. The Republicans got a big lift during the Eisenhower and Reagan years. Democrats Roosevelt and Truman benefited from the recovery that followed the 89% fall in the Dow during the Depression. The Democratic lead was solidified by the tremendous run-up in stocks during the Clinton administration.

    If these types of statistics interest you, I really suggest you pick up a copy of Stock Trader's Almanac. The book contains hundreds of fascinating historical records spotting trends and patterns in the stock market.

  5. I remember Newt taking over congress and slowing down the govt spending. Is that what you mean by the Clinton years?

    If we can get back to a republican congress and senate then Having a democrat in the white house would be ok.

    Some people say that when the branches are divided between parties that they get nothing done. I say GREAT, the less damage they do the better.
  6. I'm all for gridlock if it shuts down spending.

    I remember when the budget 'crisis' ensued.

    I loved it. I wish they would have shut down all non-essential governmental services (and I mean non-essential in the most literal sense; give me water, police and national defense).

    I'm an independent, but would hope that true conservatives would all agree that Bush II has been a fiscal disaster for our country, and history will so judge his tenure.
  7. prc117f


    My big concern is what are they going to do with dividends? Right now it is max 15% but I heard obama wants to make it 28%?

    That sounds pretty bad, all dividend stocks will end up selling off since no one will want to take that hit.

    I also read long term capital gains to go over 15% to who knows where. Wont that cause a massive selloff, no one wants to get a big haircut from taxes on investments?
  8. Big, legitimate concern.

    If they raise cap gains and eliminate preferential treatment of dividends, muni bonds may have a nice spike.

    Although, cap gains were 28% under Clinton, and dividends were taxed at a higher rate (I think) and things still did relatively well.
  9. prc117f


    But it seems unfair, I know the people voting for Obama think it is a good idea but maybe the people who will vote for him have no investments?

    These limits should only unlock for individuals making 250K or more and for a family, make it 500K or more.

    Better yet. do not tax dividends at all if it is used for dividend reinvestment but tax dividends if they are sent as cash. That way it will promote more folks to invest and might spur more companies to pay out dividends which will help the markets as well.
  10. CStar


    I don't think as a senator in the McCain administration that Obama will have any affect on the stock market. :)

    An interesting thing did happen today, however with Hillary Clinton changing her mind. My guess is she hinted at pulling out to pressure Obama into putting her on the ticket as VP. If Obama did not express an interest in an Obama Clinton ticket, she probably will stay in the race, which will screw over chances of putting a Democrat in the White House in 2009. That's about the Karma of the Democratic Party lately. They shoot themselves in the foot, which is ironic, since they generally don't support the NRA.

    I think an Obama Clinton ticket would have stood a decent chance. I think if either Obama or McCain would campaign more to support the dollar, that candidate would have a better chance. Right now, I still see it going to McCain but if Obama did win, I believe it would take a lot of the growth away from growth stocks and the dividend paying stocks would become a more popular investment strategy.

    #10     Jun 4, 2008