Are you sure it’s the Dems who are selling? Maybe it’s Republicans who foresee an Obama administration and what his policies likely will do to the market (all markets), getting out while the getting is good. My liberal friends may take falling stock prices to be a negative comment on what Bush has done. I take the market to be discounting a future under Obama’s leadership. But maybe the change is really caused by other factors than US politics.
Believe me,the dems are selling.
You will see a huge sell off on profit taking if Obama gets elected, with his talk of 25%-30% capital gains taxes.
“Are you sure it’s the Dems who are selling? Maybe it’s Republicans who foresee an Obama administration and what his policies likely will do to the market (all markets), getting out while the getting is good. My liberal friends may take falling stock prices to be a negative comment on what Bush has done. I take the market to be discounting a future under Obama’s leadership. But maybe the change is really caused by other factors than US politics.”
This is partially an equivocal Rep vs Dem argument and partially a reflection of a reality that smells far more economic and financial than Rep vs. Dem. I don’t mean to be obtuse; the important thing is to avoid getting hosed and preserve your capital if you’re in it. We could apply all manner of analysis to the state of the market, but the apolitical facts are that these persistently high oil prices are historical harbingers of poor equity performance. There are also other negative headwinds blowing through the economy; specifically the severe tightening of credit. High input costs plus restricted credit are fancy ways of saying that many, many sectors of the economy are flat out running low on gas. Just like we peons are.
Over and above that, there should be not the slightest question that higher cap gains taxes and higher taxes on dividends are clear discouragements to investing in equities. I totally agree that the market could easily be discounting a lower-profit picture under Obama, but there are real, inescapable factors affecting things, Obama or not. (And I hope like hell not!)