Is an Obama Re-Election Good or Bad for the Markets?

September 08, 2012

Is an Obama Re-Election Good or Bad for the Markets?

Are you confused? At this point, we've been exposed to so many conflicting ideals and "facts" that it's hard to know anything.

For example, if I asked you "Who was the smallest spending president since Eisenhower?" - What was the first name that came to your mind? Did you guess Barack Obama? Well, according to this Forbes article, that may be the correct answer.

In a situation like this, many dispense with facts in favor of beliefs.

As a trader, I believe the market tips his hand by showing how it responds to news. When good news is met with selling, that tells you something. However, when bad news is met with price surges, that tells you something very different.

In this case, the US equity markets are at highs they haven't seen in a decade, despite facing more than a little geopolitical, economic, and political instability.

Doesn't your gut tell you we've seen the low for the year? Isn't there part of you (that wants to argue with your better judgment) saying "Don't fight the Fed" ... ?

It is entirely possible that markets rally hard into the election.

I may not have facts, but sometimes it's easier to hold beliefs than Hope.