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Put politics aside and make some money

Today's Financial News - Posted November 3, 2008

This is obviously going to be a huge week in American history. No matter who wins the election, the nation will be changed forever. But investors must not put too much weight on presidential politics. There is more important news to worry about.

By Andrew Snyder

Baltimore – (TFN): It is the start of what is bound to turn out to be a historic week for the nation. As credit markets begin to thaw and the equities market show strength, investors just have one more major hurdle… a presidential election.

If investors follow the political scene at all, they should not be surprised by an Obama win. He has been leading the polls for quite some time and his margin remains strong. Wall Street is certainly not happy about the possibility of such a left-leaning leader in the White House, but the possibility of an Obama administration has certainly been fully discounted throughout the equities market.

But I caution investors to watch for selling on the news of a Democratic victory. It could come as a sign of protest or as a true sense of fear, but I would not be surprised to see a sizeable reaction on news of an Obama victory.

Fortunately, if it happens, it will be short lived.

There is still a chance

What bullish investors need to hope for is a victory from the McCain camp. A come-from-behind victory from the pro-business, pro-capitalistic senator would help create a strong buying spree.

Sure it would insight major riots, but more importantly it would light a fire under the market’s turnaround efforts.

Really, when we boil it all down, Wall Street does not care about politics. Investors only care about the net present value of a company’s earnings stream. As we learn more about what the economic downturn will due to those future cash flows, that is when we will see the real fluctuations in the stock market.

Over the next five trading days, certainly keep an eye towards presidential politics. And certainly watch for a Democratic landslide in Congress. But most importantly, watch for news that directly impacts a company’s bottom line.

After all, possible news out of General Motors (NYSE:GM) of a merger will have much more to do with the nation’s economic success than a bunch of campaign-trail rhetoric. So far, we have heard lots of promises from our politicians, but we are a long way from seeing anything get accomplished.

If you want to make money, keep tuned to the stories that really matter. We will have plenty of them this week.


Next Article: Target (TGT) investors call for real estate sale

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Posted by Andrew Snyder · Filed Under US Stocks and Markets 

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