So much hinges on the outcome of the midterm elections: Will the balance of power in Washington change? Will Congress extend the Bush tax cuts? The most popular question we are getting from our clients is—what does all this mean for my portfolio?ANSWER
The stock market operates in a anticipatory fashion, meaning that the expected election results are already baked into prices of stocks already.
As a long-time, card-carrying Contrarian investor, I expect the following after the elections:
Do not be a bit surprised if the market sells off and ends 2010 in negative territory. I would place the odds of that outcome at at least 50/50.
Investing Lesson
If you are going to invest in the stock market, why not get Paid to Wait for the future appreciation of the stock(s) that you own to unfold over time and ignore the day-to-day ups and downs!
If you are sitting on the sidelines, you are missing out, regardless of the future ups and downs of the markets.
