How will the election affect the economy?
RSS

How will the election affect the economy?

in

There is much at stake in the upcoming presidential election. From how to tackle the deficit to how to reduce our dependence on foreign oil, the issues are complicated and interrelated – and the candidates differ vastly on their beliefs and intended approach. How will the election affect the economy, the stock market, and you? How can you best prepare for this event, and respond to the outcome?

  • Should Romney be elected, there is little doubt that the financial services firms would face a lighter regulatory environment, which would be a boon to the sector. For instance, the controversial Volcker Rule (part of Dodd-Frank) bans proprietary trading, whereby the firm uses its own funds to generate returns, rather than profiting from client commissions. While proponents of the rule argue that it will decrease some of the riskiest behavior, it is projected to have a significant negative impact on banks’ profits. This is just one way in which Romney’s stated intention of loosening restrictions may benefit the financial services sector.
  • Another topic of heated debate as of late has been expenditures on national defense. President Obama has championed a “lead from behind” strategy, favoring diplomacy and reducing the size of our active military. Obama plans to downsize the postwar military by $487 billion over the next five years: shrinking the Army and Marine Corps, closing several domestic bases, cutting spending on new weapons programs, and reducing shipbuilding.
  • Technology may perform well should Obama be reelected. Obama has spearheaded efforts on patent law reform, signing the America Invents Act late in 2011. This law was intended to streamline and thus speed up the patent approval process. He has also championed several “lab-to-market” initiatives, partnering with universities for a “commitment to commercialization” as well as making it easier for startups and technology companies to obtain license agreements.

     

*The opinions and forecasts expressed are for informational purposes only and may not actually come to pass.  This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan.  The representative does not guarantee the accuracy and completeness, nor assume liability for loss that may result from the reliance by any person upon such information or opinions.

Securities offered through Securities America Inc., Member FINRA/SIPC and advisory services offered through Securities America Advisors, Inc. Armstrong Advisory Group and the Securities America companies are unaffiliated. Representatives of Securities America, Inc. do not provide legal or tax advice. Please consult with a local attorney or tax advisor who is familiar with the particular laws of your state. 6/12

 “Pentagon Budget Set to Shrink Next Year” Whitlock, Craig, 26 Jan 2012.
The Washington Post Online. 5 June 2012.

 “America Invents Act of 2011” United States House of Representatives: Committee on the Judiciary. 5 June 2012.

 “‘Lab to Market’ Initiatives Transforming New Ideas into New Jobs” Kalil and Maynard, 28 Oct 2011Whitehouse.gov, Office of Science and Technology Policy. 5 June 2012.