What to do between now and the 2012 election (and after)

[prototype]

I was curious as to what people are doing investment wise given the upcoming election. I am basically sitting tight on current AA other than a few minor tweaks.

Does it really matter who wins the presidential election as far as AA and future drawdown strategies go? What about if the Dems take back the House? Or the Republicans take the Senate and keep the House?

I am just curious to hear from some of our knowledgeable and experienced early retirees.

 

[73ss454]

I'm experienced but not knowledgeable. In any event I will sit tight, rebalance when need be and enjoy my retirement. I'm passed the point of worrying about all the BS in the world and what will happen to the market. After the 2008 09 mess I can live with about anything.

 

[M Paquette]

Nothing.

The effect of replacing or not replacing the President is so small it isn't worth worrying about. Fiscal policy for the federal government is set by the House of Representatives, subject to Senate passage and Presidential approval or veto. The odds that all three of these (including a supermajority in the Senate) will be in agreement on anything significant is infinitesimal, and anything they could agree on will be mostly harmless with respect to the economy.

The only risk, and a remote one, would be a move to austerity while the economy is already slow. This would produce an artificial recession. (See Europe.)

I haven't changed my view since last year...

Non-political economists (the ones you never hear about, and who don't get invited in TV) don't see GDP growth getting up to the 3.5-4% range until late 2015 to 2016, and unemployment remaining above 6% until 2016. Those are consensus numbers. The 'Blue Chip' numbers (August 2011 Blue Chip Consensus Forecast extended with March 2011 Blue Chip long-run survey of 50 private sector forecasts) has real GDP chugging along at around 2.6-3.1% til 2021 (it doesn't go past that...), and unemployment over 6% til 2017.

Most of this is due simply to the impact of the balance sheet recession and the sheer amount of time it takes to pay consumer and commercial debt back down from the highs of 2007 (300% of GDP) to the longer term level around 50% of GDP. Various proposed federal fiscal policies and programs move the GDP growth number up or down by about 0.4% and unemployment number by about 1%.

 

[pb4uski]

Staying the course. No changes. Sticking to target AA and will rebalance as needed if actual AA deviates significantly from target.

 

[frayne]

Placing my bets on pork futures !

 

[eytonxav]

I'm praying, but reality is probably somewhere between a wing and a prayer that moderate heads will surface and prevail.

 

[MichaelB]

Lets keep the discussion focused on investing.

 

[Bimmerbill]

Same as I always do, nothing. Bi-weekly payments go into my 401K as usual.

 

[Midpack]

No change in my AA related to the elections...

 

[Animorph]

Just following my normal investment plan. Buy if prices move lower, sell if they are higher. I don't expect to do anything significant.

 

[antmary]

Nothing...other than stick with my AA. I'm too busy smelling the roses

 

[marko]

Bulls make money, bears make money, pigs get slaughtered.

I doubt if who is in control matters.

 

[obgyn65]

Nothing as far as my AA is concerned.

 

[easysurfer]

What? There is an election this year?

That's my approach...to ignore and just stick to my AA and rebalance when appropriate regardless of election or other events.

 

[dmdunca44]

Our investment decisions aren't based on the political climate any more than the news on CNBC. We won't be making any changes based on the outcome of the election.

So, we'll rebalance when one component of our AA changes by more than 5%.

 

[Zathras]

Continue building up my dividends. No change from any other time.

 

[ejman]

I watch the election innies and outies like a hawk and do nothing. I occasionally watch my AA and when equities get over 55% I sell same and buy some bonds. Conversely when equities drop below 45% I would buy more equities but that hasn't happened yet. Come to think of it it has never happened during my entire investing career (since 1987) that my equities allocation would go below target and I would sell bonds to buy equities. That's trying to tell me something but I dunno what.

 

[W2R]

Like the others above, I will do nothing differently...

...other than perhaps post a "Wheee!" at some point, if/when it is merited.

 

[ejman]

Like the others above, I will do nothing differently...

...other than perhaps post a "Wheee!" at some point, if/when it is merited.

Now you stay off of that "wheee!" you hear!!!!!!!!!!!

 

[Purron]

Nothing different as far as investing for now. Just hope our house sells soon. Being in the DC area means there's a lot more anxiety than most of the country in an election year.

Talks about budget cuts could significantly impact the local economy and DH and I will keep a close eye on that for sure. Might get a bit more aggressive on pricing if the place doesn't move soon.

 

[FreeAtLast]

Nothing different. It is just another leap year.

 

[MichaelB]

Now you stay off of that "wheee!" you hear!!!!!!!!!!!

Right. Either that, or a few days advance notice, please...

 

[Huston55]

Nothing different as far as investing for now. Just hope our house sells soon. Being in the DC area means there's a lot more anxiety than most of the country in an election year.

Talks about budget cuts could significantly impact the local economy and DH and I will keep a close eye on that for sure. Might get a bit more aggressive on pricing if the place doesn't move soon.

Purron-

DW and I lived in the DC area (on the VA side) for nine years. We sold a few years ago. Although we made money (not as much as if we'd sold earlier), my one piece of advice is to not chase the market down. We did that and it caused us to have to wait to sell it. Fortunately, we could rent it at close to neutral cash flow while we waited. But, we'd have been smarter to price it aggressively from the start.

 

[rescueme]

I'm/DW are "working" on our 7th President since we starting investing in '82, and have yet to make any investment decisions based upon person/party.

We don't expect to change anytime soon ...

 

[Huston55]

I'm/DW are "working" on our 7th President since we starting investing in '82, and have yet to make any investment decisions based upon person/party.

We don't expect to change anytime soon ...

Did I miss one?

There have been five Presidents since 1982, and the upcoming one, if different, would be six.

Did you perhaps mean seven Presidential elections?