Does the election effect where we put money?

[MichaelB]

Quote:

Originally Posted by NW-Bound Surely, nothing has changed. And the market hates uncertainty.

Nothing has changed. The future is just as uncertain as it has always been.

[NW-Bound]

It's not about what we think, but what "the" market thinks.

Of course it is only with respect to the short term.

And in the long term, well, we will all be dead. Short term is all we get to deal with.

[clifp]

Quote:

Originally Posted by MichaelB Nothing has changed. The future is just as uncertain as it has always been.

I think the election had an opportunity to make things more clear by giving one side or the other control over the government. The fact that it didn' t change anything and both sides have reacted by digging in their heels, makes the situation more uncertain.

[samclem]

Quote:

Originally Posted by clifp I think the election had an opportunity to make things more clear by giving one side or the other control over the government. The fact that it didn' t change anything and both sides have reacted by digging in their heels, makes the situation more uncertain.

+1. The chance that things might change (for the worse, for the better, whatever that means to each person--but especially that control over the government might go to one side) was already baked into the pre-election prices. Now that we know what has resulted (a continuation of the previous power balance) we'll see how the market reacts. Maybe we're seeing it now.

[ERhoosier]

IMHO- Biggest 2-day point drop of year suggests election result was not priced into market, but only time will tell. I am decreasing overall equity exposure due to increased risk of another recession (due to probability of more US business regulation, ongoing Eurozone weakness, etc.). Rebalancing remaining equities towards dividend-paying economically defensive issues (consumer non-durables, non-coal utilities, water, waste management, etc.) and certain non-European foreign markets. Keeping all my fixed-income exposure high quality & short-term (~1yr max). When a gov't gets this far in debt with no clear repayment plan, risk of sudden, sharp rise in inflation (i.e. monetizing the debt) is ever present. Surely I'm not the only one who remembers "stagflation" or US Prime Rate of 20%.

[obgyn65]

I have changed nothing in my investments. Staying the course. Thinking of learning about funds and equities when I finally FIRE, maybe I will change the course then.

[Ronstar]

Quote:

Originally Posted by ERhoosier IMHO- Biggest 2-day point drop of year suggests election result was not priced into market, but only time will tell.

I heard some financial guru saying that people have been buying coal and banking stocks for some time, running up the price. When Obama (who is more anti-coal and more pro- banking regulation than Romney)was re-elected, these people sold immediately. This made some sense to me. I expect the market to be flat for awhile and for the gov't to come up with a solution that kicks the fiscal cliff down the road.

I'm going to stay put in my investments. But I think the election results will result in banking, coal, and defense contractor stocks not performing as well as if Romney was elected. There will be others that perform better under an Obama administration than under Romney. It will probably be a wash in the long run.

[frayne]

If the Mayans are correct, it's a moot point.

[Ronstar]

Quote:

Originally Posted by frayne If the Mayans are correct, it's a moot point.

True, but at least we have a month and a half left.

[bolt]

I must agree with "The future is just as uncertain as it has always been". However this is a last term, so fewer consequences for any administration.

[copyright1997reloaded]

Given the election results, I've decided to sell some highly appreciated securities. I've already done some tax estimates and I will be likely selling until I reach the AMT threshold. So, I am actually going to pay a lot more in 2012 taxes that I would have.

For example, if one had bought AAPL in late 2001, their cost basis on the stock is about $10. Sell it now, collect the $546/share. So, on 100 shares this would be $53,600 in profit. 2012 capital gains tax is 15%, so $8,040 in taxes. 2013 capital gains tax (if not extended) is 20%, so $10,720 in taxes. Net "savings" by selling now is $2,680.

The above example is real (to me), as I did buy 100 shares of Apple in 2001. Sold 1/2 after they split (big mistake, but got my $ out of the stock), and own 100 shares now. [I'm actually leaning against selling it as I think it is under priced at $546/share.]. But I have other assets that do have significant long term gains which are candidates.

There are many others out there that are doing similar analysis. This doesn't mean that the market will collapse, as it depends on where the funds from those sales are deployed. However, I think at least some of them will go to other asset classes and geographies. (At least I'm thinking that way, that I need further geographical and asset class diversification.)

[Walt34]

Thank you everyone but this thread has run it's course.

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