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Will the President Make You Rich?

In a word: No. The fact is that while an American president can be influential in setting policy in this country, Congress actually passes the laws. It’s a pretty good system. Congress is comprised of many more elected officials, which means there’s an inherent checks and balances system whereas no one person, administration or party can run the course with its own political agenda.

 

In fact, three faculty members at Wharton Business School agree that regardless of who holds the top office in the country, the future is likely to look much like the present for the foreseeable future. In a recent article, Wharton finance professor Franklin Allen observes that, “The notion in the political debate is that if you just do something a little bit differently, things will get much better. But it doesn’t work like that.”

 

He further adds that while both candidates say their policies would create jobs, he believes unemployment in this country is undermined by a much more serious problem than economic setbacks. Allen argues that many of today’s jobless must be retrained to procure new employment; a lengthy and expensive process that he says is currently inadequate.

 

[CLICK HERE to read the article, “Back to the Future: What’s at Stake for the Economy in the Obama-Romney Contest,” by Knowledge@Wharton, September 12, 2012.]

 

In its Election Report published in September, UBS Wealth Management Research claims that fundamentals matter more than party control when it comes to the markets. The report offers an overview of market performance over time based on which party was in office, but states that “While this type of analysis makes for fun cocktail party conversation, it tends to grossly oversimplify the investing landscape. We believe a better approach is to determine the outlook for corporate earnings and market valuations.”

 

While the nation’s commander may not be able to improve the markets per se, there are sectors in which his policies are more likely to influence performance than others. For example, a Romney administration may be more supportive of domestic drilling and less regulation in the energy sector, whereas Obama has pledged his allegiance to renewable power sources. On the other hand, Romney’s commitment to repeal and replace Obama’s health care and financial regulation initiatives may put a temporary strain of uncertainty within those industries.

 

[CLICK HERE to read the report, “Election Watch 2012,” at UBS Wealth Management Research, September 11, 2012.]

 

[CLICK HERE to read the report, “Exchange Election 2012: UBS invites preeminent thinkers to discuss the day’s most critical investment issues,” at UBS Wealth Management Research, Fall 2012.]

 

[CLICK HERE to read the article, “How the Election Might Affect the Stock Market,” at US News & World Report, October 17, 2012.]

 

In its mid-year election analysis, LPL Financial Research asserted that congressional elections would likely be more meaningful than the presidential one this year. The report states that “the party that emerges in control will forge the decisions that will represent one of the biggest shifts in the federal budget policy since World War II.”

 

[CLICK HERE to read the article, “Midyear Outlook 2012,” at LPL Financial Research, May 22, 2012.]

 

And if you haven’t heard from him in awhile, Vanguard founder and former head Jack Bogle is still making headlines (at age 83) with his message that investing is about choosing well and staying the course–no matter the economy, no matter the fundamentals and certainly no matter who is in the White House. In a recent interview, Bogle explains his view that the difference between trading and investing is to “own Corporate America and hold it forever.”

 

[CLICK HERE to read the article, “Jack Bogle: Forget trading, start investing” at Marketwatch, October 17, 2012.]

 

Obviously, there’s a lot of press around the election this year and what it means for taxpayers, investors, job hunters and homebuyers down the road. But the important message here is that your first priority should be to manage money toward fulfilling your personal goals–not beating the market benchmarks and not avoiding taxes. When was the last time you really thought about your actual goals, and do they need a reality check? Call us to help you gain the right perspective going into 2013.

 

If you are unable to access any of the news articles and sources through the links provided in this text please contact us to request a copy of the desired reference.

 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

 

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