NEW Common Cents: Will a new administration affect your investment moves?
Provided by Jon Gerhardt
This week, President-elect Barack Obama will become President Obama. Like people across the country, you will no doubt be greatly interested in how his actions will affect a wide variety of domestic and foreign-policy issues.
But from a personal point of view, you may also be thinking about what an Obama Administration will mean for your investment strategy. In reality, the actions of any administration generally have only a limited impact on the financial markets. In our complex, interconnected world, a variety of factors, from actions of the Federal Reserve to corporate profits, to oil prices to political instability abroad, all play a key role in determining the fortunes of the stock and bond markets. Consequently, you need to take a truly global perspective on your investment strategy and avoid getting caught up in the potential ramifications of who's in charge in Washington. Nonetheless, you may still want to pay some attention to potential changes introduced by the new administration.
Here are a couple of areas to consider:
New legislation You may want to follow the progress of new legislation proposed by the Obama Administration. For example, will a successful push toward "green" energy benefit renewable energy companies? Right now, no one can answer this question. In fact, even if these changes are enacted, it will take some time to sort them out to determine what, if any, impact they could have on various market sectors.