Taking in the Election

It wasn't a particularly long night last night and whether your guy won or lost we can all be thankful that the election is over.  This usually means that the stock market will start to go up a little, as it did yesterday.  This is not really a commentary on whether the markets like or dislike the president elect, but more a push for stability from the markets.  The stock market does not like uncertainty.  Like any good business the stock market will always err on the side of safety whenever uncertainty rears its head.  So in an election year when the contest is close the stock market will tend to level off or go down.  When the election is over it will tend to go up.

Now this has not been a normal year for the market so we cannot be sure that this is what will happen.  Also the Democratic Party will control the Presidency and both houses of Congress.  This wouldn't normally matter except that they have proposed to raise taxes on capital (capital gains tax).  This may mean that many people will try to pull their profits out before a tax goes into effect.  If you are investing for the long term (as I am) none of this matters.  Keep you money in and ride out the fluctuations.  If you need that money in the next five years it might be a good time to get your investments into a safer less volatile investment like CD's or bonds. 

As far as the presidency is concerned, Barak Obama has a big job ahead of him and he needs and deserves our prayers and moral support.  Even if he didn't get your political support.