The Next President and Your Stocks

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Wall Street is notorious for confusing retail investors. The haze extends to politics. Visit the Federal Election Commission web site. You will find that investment bankers have hedged their bets. Individual donations show no particular bias towards any one Presidential candidate. The new administration in 2009 will certainly affect your financial planning. What can you do today to prepare for next year and beyond?

Look for common ground between campaign promises. Filter your results with thinking and inclinations of the Senate. The issues which remain are the ones you should back. Buy stocks that will benefit from inevitable economic policies of the next President. We tried our collective hand at this exercise. Here is what we landed:

• Corporations that supply goods and services for operations in Iraq and Afghanistan will suffer. All candidates are committed to bring the troops home. The surge has to reverse.
• Outsourcing will lose its sheen as a cost management weapon. All candidates are determined to create new jobs for US citizens. Corporations that invest in local skill development will score over those which fight for more H-1B visas for software nerds from India.
• European patented drug manufacturers will suffer. All generic medicine suppliers will gain. All candidates want to provide relief for ordinary folk. Cheaper prescriptions and health insurance will be high on agendas. Swiss monopoly profits will erode.
• Ethanol, natural gas, hydrogen fuel cells, solar panels, geothermal energy, and wind farms will benefit. No candidate can send crude back to just 2 digits a barrel.

Not all promises are kept. There is talk of cutting back on the powers of Washington lobbies. Every campaign covers government spending cuts. Believe that if you like. Do not include any of it in your financial planning.

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