Wednesday, October 24, 2012

Election-Related Investing Themes


By now you know that America is electing a new president on November 6.  No matter which side one is on, we know that one of the candidates is going to be elected.  Like me, you may be asking yourself – “What are some of the possible effects on investing and will those effects be different depending on the winner?”

As you may know, it often is not the event itself that moves markets but the perception of the effect the event may have.  The 2012 election is no different in this regard, so ignore the promises let’s focus on the likely outcomes.

Here are the Big Picture issues as we see them from an investment perspective:

Issue
Obama Re-Elected

Romney Elected
Regulation
Environment
Financial

Minus
Neutral or minus


Plus
Plus
Energy
Carbon
Alternative
Nuclear

Neutral/mild minus
Plus




Neutral

Plus
Minus
Tax
Neutral/mild minus

Neutral/mild plus
Social Security
Neutral

Mild plus
Medicare
Plus

Minus
Medicaid
Plus

Neutral
Fiscal Cliff
Tax Rates
Sequestration

LT minus
LT minus
ST Neutral

LT plus
LT plus
Health Care
Hospitals
Doctors
Med Technology

Plus
Minus
Minus


Minus
Plus
Plus
Defense


LT neutral/minus
ST Neutral

LT plus
Exports
Plus

Minus

ST = Short Term – less than 6 months
LT = Long Term – more than 6 months


Drill-down to sectors/industries:

Sector/Industry
Obama Re-Elected

Romney Elected
Oil & Gas
Neutral

Plus
Coal
Minus

Plus
Alternative
Plus

Minus
Financials
Neutral/mild minus

Plus
Transports
Autos
Rail

Minus
Minus


Plus
Plus
Health Care
Hospitals
Pharma
Med Tech

Plus
Neutral/Minus
Minus


Minus
Plus
Plus
Defense


LT Minus
ST Neutral

LT Plus
Exports
Aerospace
Technology
Autos
Food
Agribiz
Processers
Machinery
Sofware/IT
Nat Gas
Plus

Minus
Housing

Neutral

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