Forget the partisan yammering over which presidential candidate has stronger family values, is more in debt to special interests, or more likable. Let's talk about what the new occupant of the Oval Office could mean for your portfolio.
No one should base long-term investment decisions on an election. Still, if some campaign promises turn into actual policies, it's possible they might affect the economy or certain sectors.
How a party's candidate will influence financial markets isn't always obvious. Many people assume that the stock market performs better under business-friendly Republican presidencies. Not necessarily so. Look at the past eight years.
Or look at the past 52 years, said Anthony Chan, chief economist with Banc One Investment Advisors in Ohio. Since the 1948 election, Chan said, the Standard & Poor's 500 index rose an average of 9.3 percent during Democratic administrations compared with 4.5 percent when Republicans controlled the highest office.
A Democratic president, Bill Clinton, has presided over the longest economic expansion in U.S. history. Republicans need to convince likely voters, the majority of whom own stock, that they want a change. "The economic statistics would suggest that Democrats have the edge," Chan said. However, he added, one survey shows that Americans by a 3-to-1 margin give Bill Gates, not Bill Clinton, credit for the booming economy.
Here are some stocks that financial experts predict might fare better under one or the other of the major party candidates, Republican George W. Bush and Democrat Al Gore:
George W. Bush
Defense. The Pentagon's budget would be expected to get a big boost under Bush and his running mate, former Defense Secretary Dick Cheney. That would be welcome news for defense companies whose stocks have been in the doldrums, experts said.
Tobacco. "A Bush administration would be much more likely to throw roadblocks into these big jury settlements against the tobacco industry," said Peter Ricchiuti, assistant dean at Tulane University's business school in New Orleans.
Financial services. Bush proposes to allow individuals to invest a portion of Social Security funds in the stock market. That could mean another $5 billion to $6 billion pouring into the market, which would benefit financial services stocks, said Patrick Buttarazzi, associate vice president of investments with Prudential Securities in Baltimore.
