11/7/2012 6:30 PM ET|
Obama wins: Where to invest now
There are plenty of opportunities to make money, though some of the choices aren’t obvious.
The stock market loves President Barack Obama. With all its cheating heart, and all its mercenary soul.
More than that, actually -- it adores him. The love story of Wall Street and Obama is a bromance like no other, a man-crush for the ages.
Despite his threats to soak the wealthy for more taxes, despite Fed Chairman Ben Bernanke’s attack on savers, despite even his threat to kill special treatment for dividends, institutional investors have thrown themselves at Obama’s feet as they have not done in the first term of any president in the past century.
Compare that withthe S&P 500’s 13% decline and the Nasdaq 100's 45% wipeout in the first term of his predecessor, George W. Bush; or the mere 25% gain in the first term of conservative icon Ronald Reagan; or even the 60% gain in the halcyon early 1990s in the first term of Bill Clinton.
The staggering advance of the market is probably one of Obama’s greatest accomplishments, and yet, in a rich irony, political sensitivities prevent him from bragging about it.
The beautiful part is that this was not a coincidence, beginner’s luck or a historical fluke.
The administration and the Federal Reserve run by his appointed chairman, Bernanke, have systematically stuffed big banks’ pockets with cash in an unending rescue effort, slashed interest rates to the lowest levels of the past 300 years, diverted senior citizens’ savings to revive the moribund residential construction industry and showered drugmakers and insurers with fresh sources of revenue from his health care overhaul.
Little wonder then that Wall Street couldn’t bear the idea of parting ways with the Obama administration, and thus over the past two months threw an extended tantrum to protest the surprising advancement of GOP challenger Mitt Romney in the polls.
Now that the president has won a second term, you can expect most of the sectors that have benefited from the present administration to keep on rolling. Here are some top prospects:
The Patient Protection and Affordable Care Act, the president’s health care initiative, set out new mandates, subsidies and credits to employers and individuals to increase Americans’ access to health care. Upon its passage in March 2010, investors began boosting the shares of drugmakers, insurance providers and hospitals because they all suddenly had a lot more paying customers, courtesy of the government and taxpayers.
Shares of Pfizer (PFE), for example, had fallen 50% during the eight years of the Bush administration, January 2001 to January 2009. In contrast, its shares are up 70% during the Obama administration, almost in a straight line. Some 64% of the gains in the maker of Viagra, Zoloft and Lipitor have come since Obamacare passed.
Overall, SPDR Health Care Select Sector (XLV), exchange-traded fund, which includes all the health care stocks in the S&P 500, is up 31% since the president’s health-care law passed, versus 27% for the broad market.
More from MarketWatch:
VIDEO ON MSN MONEY
Article says Nasdaq up 128 percent since Obama took office.
S&P 500 up 76% and yet half of the country voted for Romney the flip-flopper. Idiots!!
I noticed all those red electorial college areas for Romney were mostly in oil and gas producing states. Did you know we are drilling more oil and gas under Obama than we did under Bush?
And yet, there is this misconception among rednecks that Obama is going to take their guns away and cut out their drilling jobs. Obama couldn't care less about your guns and the nation needs more clean-burning natural gas. Semitrucks are running on it and someday we may have cars running on it. Our number one mission after getting do-nothing Congress to fix budget is to educate our people and move FORWARD.
Wall street like Obama because he keeps dumping billions of dollars into the economy, which in turn goes into those investors pockets. As far as investing? Gold, silver, lead and weapon stocks.
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[BRIEFING.COM] Equity indices continue holding their recent levels with the Nasdaq Composite (+0.4%) and Russell 2000 (+0.4%) tied for the lead. In fact, high-growth names are showing relative strength for the second day in a row with the Nasdaq and Russell 2000 extending their week-to-date gains to 1.0% and 0.8%, respectively. Meanwhile, the Dow Jones Industrial Average remains flat for the week.
Interestingly, high-beta chipmakers have not taken part in the small-cap rally. The PHLX ... More
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