Why is there an overiding theme in the financial arena that says republicans are good for the stock market and democrats are bad? People think that if a democrat raises taxes, people will have less money to spend and companies will make less money. But nothing is ever said about where that money goes to. There isn't any less money in the system, it's just being spent differently. If Obama taxes everything and then spends billions on health care, don't you think health care stocks will go up? What about the millions in new government jobs that will be created? Those people will spend money. Besides what's so bad about the stock market going down? What's good for Wall street is usually bad for Main street and vice versa. Look at the XLE. It's up dramatically. Why? Because people are paying more for gas. The XLF has gotten hammered. Why? Because banks are taking losses from sub prime loans that defaulted (among other things). These are losses that homeowners should have taken, but banks have to write them off as bad debt because they're uncollectable. See what I mean. Then there's the times when the the government says to support the economy by going shopping. So that's great. Walmart makes more money on the purchase. Then Visa gets money on the transaction. Then Chase makes 24% interest. China of course makes money by making a piece of junk that hopefully isn't toxic. And we pay for it all. If you're afraid of the market going down, just short it. It's not unAmerican. You're profiting from a large corporation going down. That's called stickin it to the man, and that's about as American as it gets.
"Over the years, stock analysts have suggested that the market prefers Republicans in the White House. This apparently arises from the view that Republican administrations are more favorable toward business than Democratic administrations. Most studies attempting to document this have focused on the stock returns around elections, and find weak evidence for this in the behavior of the stock market. In this study, we examine the returns on the market over the Democratic and Republican terms in office from 1871 to 1997. We find, contrary to earlier belief, that there is no support for returns being different under one political party versus the other. The old adage that the market prefers Republicans is not evidenced. On the contrary, the evidence indicates a slightly, but not statistically significant, higher returns during Democratic administrations." http://www.frbsf.org/econrsrch/wklyltr/wklyltr98/el98-19.html More perspectives. "the stock market has done far better under Democratic presidents than under Republicans. How can it be that investors have failed to take advantage of this seemingly predictable pattern?" http://personal.anderson.ucla.edu/pedro.santa-clara/Politics.pdf http://people.ischool.berkeley.edu/~hal/people/hal/NYTimes/2003-11-20.html http://www.usatoday.com/money/perfi/columnist/krantz/2005-12-02-presidents_x.htm C'mon folks, do some research.
Anytime we increase military spending the Dems require almost an equal amount of increase in social spending. Happened with Reagan also. Every dollar additional spent for military an equal dollar has to go to entitlement spending. Clinton cut spending, in real terms , on the military, remember the "peace dividend". This was the cause for the balance budget, Having a REP. house made the difference also.
" "the stock market has done far better under Democratic presidents than under Republicans. How can it be that investors have failed to take advantage of this seemingly predictable pattern?" C'mon folks, do some research. [/QUOTE] You have to remember that in modern times it was a republican that had to come in to clean up the mess left behind by the DEM. Since a president has to live with the budget and policies of the previous president for the first year, you should look at a 5 year span. 4 in office plus next one out of office
Well, I admit, I have a biased view and opinion, and that is, you are correct in the above, if you simply reverse the order! But not to worry, the first item on your list will not occur, so the question reallt is: Obama, bearish or bullish? And the answer is, both! So, the question then becomes: In what order of sequence?, and, in what likely timeframe?
both bearish in my view... except for Chinese stocks, for which both will be very helpful as rabid free traders seeking to transfer American capital investment abroad.
I'll pass on the who is what for the market in the long term but offer up a short term strategy. Find the thorn in the side of either man who is up for election in the House of Representatives, find the legislation that may affect the sector and the stock, if one wins and the thorn loses you got lift off. No suggestions as of yet.
I always figured that with Republicans coming into office investors would load up on stocks (drive up prices, lower returns) in anticipation of good times, while with incoming dems they would dump stocks (lower prices, increase returns) because of all the economic ills dems represent. I wouldn't be surprised to see returns higher during the course of a Democratic administration.
Between the two parties, why would anyone equate democrats with larger government now? Apparently, republicans represent much larger government than democrats. So why would anyone equate democrats with larger government? Yep, propaganda.