Now that the race for the White House has been narrowed to two primary candidates, it's time to consider the election from the standpoint of a fund investor, trying to decide which candidate is best for the portfolio.
It's not that fund investors should vote with their wallet rather than their conscience, but rather that anyone undecided and not concerned about party lines might want to factor in how the election could hit home financially.
It's also very early to analyze the situation, as neither candidate has come out with so much economic and tax policy information to make everything clear.
Still, chatting with veteran political and fund-industry observers, there are some conclusions to be drawn.
The conclusion most people jump to is that the business and investment community should always favor Republicans, but that is not quite so clear at the presidential level. Historically speaking, the stock market has performed better with a Democrat in the White House than a Republican; on a short-term basis, analysts suggest that trend could continue.
"History has shown that the first two years of a presidential term tend to be the worst years for the stock market, but you could certainly expect that any policy that favors fiscal expansion would be better received by the stock market in the short term," says Thurman Smith of Equity Fund Research in Malden, Mass. "You can argue about what is the best course for the economy in the long term, but if you expect Obama to increase government spending, then you would expect the market to do a little better for the first two years than if McCain wins."
Smith and others are equally quick to note, however, that the president had only a limited impact on the economy and has even less effect on the market, so that the short-run market potential is not a particularly convincing reason to vote.
A bigger reason might be who can help you best increase your nest egg. Neither candidate - Republican John McCain or Democrat Barack Obama - has said much on any type of savings policy, and there is nothing on the legislative horizon that calls for immediate action. So that's worth watching.
