Do you think the stock market will rebound after the election? Let's assume Obama is elected....?

Question

I am watching a small (very small) stock portfolio slip from small to miniscule. It's fallen by 30%.

It is so dismal that my hope now is pinned on the market rising after the election.

Let's assume Obama gets elected.

Any thoughtful and informed opinions on whether this factor alone could improve a sense of optimism and rally the market..?

When and for how long?

Of course my question is 'about' my own dismal situation on the stock market, but I wish to be informed at a broader level about the types of 'forecasting factors' others may feel are important to throw into the mix in looking ahead at the market.

Particularly.. the upcoming presidential election.

Now, before smirking at my naivete and launching into a solipsistic commentary about the many complex variables and how could I not know about these...

Decide if you may wish to respond to a novice.. and if not, thanks anyway..!

To those of you in educative mode.. thank you!

Sell now or wait and see?

Answer 1

I don't think is matter to much who will be elected. Is matter more what company do you have in your portfolio. If they are like Indymac bank you will end up with zero! (Sorry).

If you think they are good company, hope for a rebound!

Personally I don't like to buy a stocks in companies is too risky if you don't diversify and you don't really know those companies... Is much safe to buy ETF on sector or index.

After that, when is a bear market the price is under 200 days moving average (we are in last months in this situation) why should I buy? only to see going down and down! You suppose to buy a stock/index/commodity when the price is starting to go up! you want to make money didn't you? if you buy and is going down? what is the point?

As long the trend is down short the stock/index sell call options.... Know could be kind of late for this because MAYBE we are near bottom...

Answer 2

You should Never "watch" a portfolio slip down 30%, good investing practices dictate that if a positions drops 8%-10% it should be liquidate.

If you're holding blue chips, you should sit with them now and ride out the market

If Obama gets elected, the economy has a very good chance of being destroyed.  No country can exist on his proposed tax increases, raising corporate taxes (which hurt the market directly), additional government spending, reduction in military spending and weakening the military in general will not sit well, not only here at home, but with the our forgein policies and our relationship with  our allies

The stock market goes up and it goes down, if the market and corporations are left to the free enterprise capitalistic systems that made this country great we will wheather this stormy market.  As long as we have smaller government we will do well.  Governments destroy economies more easily than promote them

Answer 3

Market is current in a rally during a bear market.

We will be heading lower over the next 6 to 12 months is my guess.

Does not matter who gets into office.

Too many negative variables to prevent a bull market for a while.

1. Fuel Prices

2. Weak Dollar

3. Credit Crunch

4. Bank Losses

5. Real Estate both Commercial and Residential

6. Terrorism

7. War

8. Possible tax increases

9. Government deficits

10. Weak consumer spending

11. Recession

and many more that needs to play out.

Answer 4

Obama and a Democratic Congress will most assuredly raise the capital gains tax.  My guess is that you will see an initial sell off by individual investors looking to take profits under the current tax rates.

Obama's initiatives (campaign promises) are costly, promising something to everyone and expanding the role of government.  This will cause additional stress on the dollar, as if it doesn't have enough stress on it already.  Causing the market to go down.

Obama refuses to entertain expanding use of American reserves of oil and coal and use of nuclear power.  This will put upward pressure on the price of oil.  Compare a chart of the price of oil with the Dow, they seem to be inversely related.

Obama wants "cap in trade".  The more successful you are, the more carbon you produce.  You will be taxed on your success you will have to buy "carbon credits" from companies that aren't successful and have excess unused carbon credits.  Taxes placed on companies are regressive and always flow to the consumer.  Goods will cost more, people will buy less, profits will suffer.  Not good for the market.  It will be good for underperforming businesses as they will be able to get 'money for nothing' as they sell their carbon credits.

Vote wisely.

Answer 5

No one knows for certain where the markets will go.  Right now they are trending down so I have no reason to believe they will not continue to trend down.  

But I have to be thinking we are getting close to a bottom.  Were just not getting any sign that the markets have hit a bottom and are changing directions, yet.

Answer 6

Your portfolio has slipped by 30%.   You need to understand;

Asset Allocation

Position Sizing

Risk

Money Management

Having an exit plan before you take a position.

The market will eventually go back up.  But it looks like you're playing with no game plan & buying only "hot stocks"...... a pure receipe for disaster.

You don't want a complex answer... which will stop you from understanding what will prevent you from future major losses.

Forget the elections.  Learn. Read.

Check out;

Trading In The Zone, Mark Douglas

Mastering The Trade, John Carter

High Probability Trading, Link

check out;

http://www.alphatrends.net/

http://www.mytrade.com/

http://www.thekirkreport.com/

BTW: You're comment about how the ecomomy will be destroyed if Obama is elected is...... just plain wrong.

I'm not saying the democrats are the answer!  But people said the same thing about Bill Clinton.... and the market did great! As a trader you need to listen to the market.... not your "point of view"......................................

Forget your theories..... they'll kill your trading success.

Answer 7

Hold them.  It is going to go up.

Things can't be any worse than a

. pro war

. pro spending

. pro instability

. pro deficit

. me against the world

president as Bush.  Any one else is better.