QNIssue_110108 web - QNotes

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QNIssue_110108 web - QNotes

Not for Reproduction Q-Notes Not for ReproductionD O L L A R S A N DMoney Mattersby J. Lynn Davidson, CFP, CLU . Contributing WriterInvesting in the wake of an electionS E N S ETheQmarkets are unpredictable —-rising were electedN(Bill Clinton inO T E Sand falling. In any election year, an additionalelement of uncertainty is added to the 15.30 percent). However, the two worst six-They’re here in1996, +18.64 percent; John Kennedy in 1960,investment mix. Investors can only speculate month periods also occurred underQ-Notes.as to the outcome of the presidential election Democratic Presidents (Harry Truman inin November. The question then becomes 1948, -8.03 percent; Jimmy Carter in 1976, -To advertise, call 704.531.9988 or emailwhat to make of the results from an investmentstandpoint. The answer, according to Another caution3.54 percent).adsales@q-notes.com.recent history, is that the impact on investors Market analysts also may try to determinewhich industries or types of stocks• • •may be limited.The immediate reaction to electionwill perform best based on the election outcome.This may be a factor to consider inresults in the first weeks after the election,appear to work moderately in favor ofmaking investment decisions, but certainlyRepublicans. In the post-war era (beginning not the only one. Among the uncertaintieswith the election of Democrat Harry Truman that must be accounted for is that policiesin 1948), the stock market (as measured by promoted by a candidate may never becomethe Standard & Poor’s 500 stock index, an reality once they are thrown into the mix ofunmanaged index of stocks) rose an average Washington politics.of 2.25 percent in years when RepublicansYou can expect to see a fair amount ofcaptured the presidency (nine times).media attention over the coming monthsMarketsQgained 1.31 percent from Election-about theNprospects for investors based onO T E SDay to the end of the election year, on average,in the six times Democrats won the pres-markets. To determine appropriate invest-election results. There is no way to predict theidential race.ment options for yourself, speak with yourA mixed bag of resultsfinancial advisor. ◗In the past, the situation changed over This information is provided for informationallonger time spans. Using those same 15 postwarpresidential elections as a measuring nature and should not be applied or relied uponpurposes only and is intended to be generic instick, history shows that over the first sixin any particular situation without the advicemonths after elections, markets actually fared of your tax, legal and/or your financial advisor.better when Democrats won compared to info: 704-987-9794 . email: lynn.j.davidson@ampf.comRepublicans. The average return of the S&P500 over the six months after the election was5.61 percent when Democrats won and 2.17percent when Republicans were elected.Looking over the four-year period (fromJan. 1 post-election year through Dec. 31 ofthe last full year of each term), the advantageremains with Democrats. The average fouryearreturn when Democrats won the nation’shighestQoffice was 43.51 percent, while-theN O T E Saverage when Republicans prevailed was31.80 percent.The one thing that can be said with certaintyis that there is no way to attribute marketperformance to election results. Any numberof factors, from world events to the economicenvironment to other market conditions,will likely have far more impact than theparty of the officeholder. The two best sixmonthreturns occurred when Democrats• • •Support thecompanies andorganizationsthat rallyfor you!Q - N O T E SNOVEMBER 1 . 2008 • QNotes 19Q-Notes Not for Reproduction Q-Notes

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