And the winner is....
When this blog goes live hurricane Sandy will be a storm in the record books, trick or treat time is over, and we will be watching the as the polls close to learn of our new president. The market will now focus on who is in the White House and what he will do now with Congress to solve, allow to happen, or kick down the road the pending “fiscal cliff” issues.
These decisions in all likelihood will be the “make or break decisions” that will not only set the tone, but also the direction of the markets for the remainder of this year and in all likelihood the first six months at minimum of 2013.
We have spent a large part of October analyzing fund companies and the best positions for our portfolios. We are prepared to continue this vigilance daily through the year end.
Let’s take a look at the two possible outcomes. First the outcome of President Obama’s re-election and his seemly dedicated approach to the economy to allow the tax hammers to fall. If this occurs, it is our opinion that the market will react and we expect a decline at some level. To prepare for this situation, we have gone back and looked at how assets performed through both the October 2008 and August 2011 market declines. We feel we have identified the assets that are at the most risk and those assets who in fact held their own. We have developed an internal plan on how we will position existing portfolios to weather that storm.
On the other hand, we could have a Romney Presidency and a willingness of Congress to embrace the tough issues of the “fiscal cliff’ by giving some indications that both the hard work and solutions can be agreed upon and implemented. This might even mean that another “kick the can down the road” is going to happen, but from there solutions are coming. If this scenario plays out we and many others believe the market might even rally and could just possibly end up for the year. Under this plan we will possibly need to pivot to rebalance the portfolios to take advantage of this opportunity.
With either result or what could be some combination of the above scenarios, we feel we are ready to take advantage of this week’s election results. If you would like to learn more about how the election outcome can affect the market and your portfolio, we invite you to attend our seminar on Monday, November 12th where we’ll discuss this. To register, just call our office at 336-544-6800.
The one thing I feel confident in is that November and December will both be interesting and important for the market. We are ready for the challenge. Stay In touch with your advisor and stay FOCUSED.