Will The Stock Market Impact The Election?

The stock market hasn’t done very well at all, and is down roughly 5% from it’s highs just in the last month with another day in the red shaping up for today (the S&P is trading around 1400, having fallen from roughly 1470 earlier this month).

I think another 4-5% before the election could be devastating to President Obama, and given how quickly we’ve shed the amount we have, a drop of that amount (or close to it) could definitely happen, especially with the way that the market has been trending down.  It only takes a few tenths of a percentage points a day to add up to a pretty big drop.

Such a large drop would be roughly a double digit drop and would signify a pretty big warning sign about the economy.  Since the stock market is forward looking (meaning the movement is largely centered upon what investors believe is going to happen down the line), this would be a very bad sign.

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Are We Asking The Right Question About Four Years When Looking At The Presidential Election?

One of the themes of the election has been around the question “Are you better off than you were four years ago?”  If I’m correct, I believe that this was started by Ronald Reagan when he attempted (successfully) to oust then-President Jimmy Carter from office.  In the current election, Mitt Romney has used this for the same reason, trying to oust the incumbent president from office.

Regardless of what your answer is, it occurs to me that we’re asking the wrong question.  The question you really need to be asking yourself does not pertain to the past four years, but instead on what you think will happen over the next four years.

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