10/2/2012 6:50 PM ET|
Obama or Romney: Place your bets
Exchange-traded funds offer a way for investors to bet on the impact of almost anything, including the outcome of the presidential race. Here are a few ideas for each contender.
Investors' love affair with exchange-traded funds seems almost unquenchable. Even in the midst of the recent stock market rally, they have been dumping actively managed mutual funds and snapping up ETFs instead, according to a recent series of data releases from tracking firm Lipper. In response, issuers are flooding the market with new products on an almost-daily basis -- there seems no end to the myriad ways one can slice and dice the universe of publicly traded companies in order to bring yet another flavor of new ETF to the market -- and providers like Charles Schwab (SCHW) are slashing costs to make them even more appealing.
Little wonder, then, that pundits of all kinds are devising just as many ways to use ETFs to explore various investment themes. Want to know the best ETFs to obtain high yields from overseas stocks? To get the maximum exposure to Apple's (AAPL) stock price movements? To play rising gold prices? There are at least a half-dozen options -- and twice the number of ETF analysts eager to tell you all about their relative merits.
So, now that we have only five weeks to go before the presidential election finally takes place (and the hapless residents of "swing" states can call their lives their own again after being bombarded with political ads of all stripes for the last year or so), are there ETFs to pick if you believe one party or another will win the race?
Absolutely, says ETF analyst Todd Rosenbluth at S&P Capital IQ. And those options go far beyond simply going long the Standard & Poor's 500 Index ($INX) if you believe that President Barack Obama will be re-elected. (Historically, the index has generated higher returns under Democratic presidents than under their Republican counterparts -- and yes, that may well be more a matter of coincidence than causation, but that never stopped investors from jumping aboard what they thought was a trend -- just think of the whole debate over the stock market's prospects and hemlines, or the outcome of the Super Bowl every January.)
Some of the suggestions from S&P Capital IQ about sector ETFs are fairly easy to anticipate and understand. For instance, health care. Hospitals may well benefit from a boom in the ranks of those with medical insurance -- they will no longer have to foot the bill for treating uninsured patients who show up in emergency rooms with non-emergencies like the flu. Pharmaceutical companies that specialize in generic or lower-cost medications may also benefit, S&P Capital IQ concludes. The ETF to own? Well, the largest is the Health Care Select SPDR (XLV), which has big positions in Johnson & Johnson (JNJ) and Abbott Labs (ABT) -- both of which S&P Capital IQ believes are undervalued, high-quality stocks.
Equally unsurprising is the notion that the financial services sector would fare better under the hands-off approach of a Romney administration. That election outcome would mean a new team of regulators -- and a high probability of a far more lax interpretation of some of the laws passed in the wake of the financial crisis, such as the Dodd-Frank Act. So if you think Romney has the edge, S&P Capital IQ suggests tilting in favor of ETFs like the iShares S&P Global Financials Sector Index Fund (IXG), which has significant holdings of many large financial institutions, including those that have complained that Dodd-Frank's provisions are a major head wind to profits.
A few other ideas are somewhat less obvious. For instance, S&P Capital IQ suggests that telecom services stocks may thrive under Obama, who has been willing to help carriers expand their broadband networks, while transportation stocks could benefit from a Romney administration that encourages the development of shale oil-and-gas reserves and that reduces regulation of the coal industry. Railways, for instance, ship coal as well as the pipe and other construction materials required by the energy industry seeking to extract reserves from shale deposits.
Sadly, as with so much else in politics, there's little way to hedge your bets here. S&P Capital IQ concludes that the sectors helped by one party's victory at the polls will be hurt by the triumph of that party's adversaries. Experts say it's largely a zero-sum game -- and that makes it riskier to try to play.
True, you can watch the polls and try to play the odds, but you might be just as successful betting outright on the triumph of one candidate or another on Intrade. Moreover, whether the Obama administration is reinstated for another four years or Romney's team takes power, the odds are that their policies, as they take shape, will have an impact on stock performance (as opposed to market sentiment) only over the longer haul.
The scenario under which we all win? When the verdict is in, the dust has settled, and Congress can get back to crafting some kind of solution -- however temporary -- to the looming "fiscal cliff." Removing uncertainty and nervousness is the best possible outcome of this election for investors of all political stripes.
More from The Fiscal Times:
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Failure in every single aspect, again and again. And that disgrace of a VP in Biden. What a pathetic excuse for a 'second in command'--constantly given cover by the media and partisan hacks.
I guess our country is full of morons ready for their handouts.
If Obama wins, America will finish the fall. He has failed in every aspect, so will America. Wake up America !
A vote for Obama is a vote for socialism.
A vote for Romney is a vote to save America and get rid of the racist thug in the WH.
Quit trashing President Obama's accomplishments.
He has done more than any other President before him.
He has an impressive list of accomplishments:
First President to apply for college aid as a foreign student, then deny he was a foreigner.
First President to have a social security number from a state he has never lived in.
First President to preside over a
First President to violate the War Powers Act. .
First President to be held in contempt of court for illegally obstructing oil drilling in the Gulf of Mexico .
First President to require all Americans to purchase a product from a third party.
First President to spend a trillion dollars on 'shovel-ready' jobs when there was no such thing as 'shovel-ready' jobs.
First President to abrogate bankruptcy law to turn over control of companies to his union supporters.
First President to by-pass Congress and implement the Dream Act through executive fiat.
First President to order a secret amnesty program that stopped the deportation of illegal immigrants across the U.S. , including those with criminal convictions.
First President to demand a company hand-over $20 billion to one of his political appointees.
First President to tell a CEO of a major corporation (Chrysler) to resign.
First President to terminate America 's ability to put a man in space.
First President to cancel the National Day of Prayer and to say that America is no longer a Christian nation.
First President to have a law signed by an auto-pen without being present.
First President to arbitrarily declare an existing law unconstitutional and refuse to enforce it.
First President to threaten insurance companies if they publicly spoke-out on the reasons for their rate increases.
First President to tell a major manufacturing company in which state it is allowed to locate a factory.
First President to file lawsuits against the states he swore an oath to protect (AZ, WI, OH, IN).
First President to withdraw an existing coal permit that had been properly issued years ago.
First President to actively try to bankrupt an American industry (coal).
First President to fire an inspector general of Ameri-Corps for catching one of his friends in a corruption case.
First President to appoint 45 czars to replace elected officials in his office.
First President to surround himself with radical left wing anarchists.
First President to golf 73 separate times in his first two and a half years in office, 102 to date.
First President to hide his medical, educational and travel records.
First President to win a Nobel Peace Prize for doing NOTHING to earn it.
First President to go on multiple global “apology tours” and concurrent “insult our friends” tours.
First President to go on 17 lavish vacations, including date nights and Wednesday evening White House parties for his friends paid for by the taxpayer.
First President to have 22 personal servants (taxpayer funded) for his wife.
First President to keep a dog trainer on retainer for $102,000 a year at taxpayer expense.
First President to repeat the Holy Quran & tell us the early morning call of the Azan (Islamic call to worship) is the most beautiful sound on earth.
First President to tell the military men and women that they should pay for their own private insurance because they “volunteered to go to war and knew the consequences”.
Then he was the First President to tell the members of the military that THEY were UNPATRIOTIC for balking at the last suggestion.
First President to side with a foreign nation over one of the American 50 states ( Mexico vs Arizona ).
How is this hope and change working out for you?
THERE'S AN ELECTION COMING UP...I HOPE YOU REMEMBER THIS LIST WHEN YOU VOTE!
Things you might want to know about our Liar in Chief Obama:
It's Romney time America. We need a leader. Not a Loser as in Obama.
This is how Obama takes care of friends that lie for him:
Throw them under the bus just like the rest of America.
Our two presidential candidates are #1 Romney, he isn't charming or as atractive as president Obama and has the personality of a cold fish. President Obama he is tall, handsome charming, very intelligent and verbose, he says what he figures we like to believe. He is like the pied piper atracts hordes of mice ( in this case, us) that follow him without thinking.
Voted for Obama for he offered hope, jobs, transparent government and a better world. Instead he has shown us that he is ashamed of us. One of the first actions he took was to visit different countries apologizing for our behavior. If we are so evil and disgusting why did he want to become our president? I feel dissapointed and betrayed. Now I pay careful attention to his speeches and his statements. He says that F means forward, instead is Failure, Fake, Fraudulent. He takes credit for the accomplishment of others and doesn't admit his wrongs, instead blames others, he is very convincing or at least people are willing to believe it.
Jobs: Has obstructed/discouraged our self reliance in our natural resources, oil, coal sacrificing millions of jobs but merrily encouraged other countries like Brazil to drill for oil, sent them money to back them and even told them we would be their clients.
To improve the economy : Introduced and muscled in a healthcare reform with taxes embedded and with actions that are dangerous to our seniors, like yesterday a clause kicked in that hospitals are not allowed to re-hospitalized an individual within 30days if they do thet are penalized . What? There are people who suffer from heart attacks, strokes, cancer etc who even if treated with the best of treatments may have to be re-hospitalized within 30 days. So then what? The Congress/Senate both democratic mayority approved his plan. Who in their sound mind would sign a contract without first reading it?? The President believes that we are incompetent, accuses the republicans of favoring the rich; Time and time again history shows that the rich don't lose, they will pass their taxes to us or they will move either way we will pay for it, so what he says is laughable since he gave millions to his favorite millionaires and billionaires. Remember the millions for Solyndra and others which went belly up, they used the money for the pensions and bonuses of their CEO's and other important employees.
Has sold our country to his so called ideals: To obviously terroristic acts hesitates in calling them terrorists, example: Masacre at Ft. Hood, Texas, murder of the Consul in Benghazi when there had been previous attacks to the Consulate but the Consul was betrayed and left there without appropiate security. How could he. On top starts apologizing for a movie that insults the Prophet Muhammad? This President doesn't love Americans, he loves his ideals and will not hesitate to sacrifice our country for those. Our money has been devaluated due to his policies, what else?
Who am I going to vote for, the charmer, likable and handsome or the cold fish personality. I have no trust in the charmer anymore I will leave him for the mice if I love America i will vote for the Cold Fish but who can lift this nation from hopelesness and make it more secure, will not betray us.
What pisxes the Turds off is that Clint Eastwood hit it right on with the empty chair.
Look what's happened this past week. It's still empty. Obama is busy some where in the country trying to blow smoke up America's asx for another 4 years.
America has already rejected you. Just waiting for Nov. 2012.
How can anyone with a brain and conscious vote for Obama. He has not proven to be President material and does not deserve to be re-elected. If you care about your country you will vote for Romney. If you want to watch America destroyed and it's wealth redistributed throughout other countries than Obama is your man. I voted for him in 2008 and do not like what he has done and have enough sense to know he is not who we need for our Country.
Your Country is counting on you.............Vote for a President...........NOT A PARTY!!!
O'Bummer is from Chicago... at least recently... and is an avid fan of the White Sox.
While he has not officially said so, Romney was born in Detroit and should be considered a Tiger fan.
On Monday, the Detroit Tigers end the season for the Chicago White Sox.
On November 6th, Romney will end Obama's stay in Washington and he can go back to Chicago and help Emanuel with the Teacher's Union. Maybe he can take over management of the White Sox.
Obama hates America and Americans.
America will kick him to the curb on Nov. 6, 2012.
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In the foreign exchange market, the Dollar Index is higher by 0.2% after early buying produced a test of the 84.20 area. However, trade slipped back below the 84.00 mark when St. Louis Fed President James Bullard suggested the Fed could take rates negative, but a lack of support prevents that from taking place at this time. The Index briefly slipped into negative territory, touching 83.65 ... More
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