Independent Investment Advice Blog

Romney victory won’t fix stock market: Independent Financial Advice

     Presidential candidate Mitt Romney won in New Hampshire Tuesday and won in Iowa last week. It is rare to win both of those primaries.

    It may be tempting to think that if Romney sews up the Republican nomination early then he can have a high chance of a victory against Mr. Obama. Then one could be tempted to assume that a Republican president will implement business friendly policies that will make the stock market go up. However, new policies need to be authorized by Congress and even if the Republicans win control of Congress and the White House there will be moderate Senators who will dilute or filibuster the Republican’s programs. Most importantly the huge Federal deficit and need for more stimulus will make tax cutting nearly impossible even if the Republicans control Congress.

    In a simplistic forecast of the election one might be tempted to assume that the incumbent Mr. Obama will get the blame for high unemployment and be fired by the voters. However some of the unemployed may feel that Obama’s leftist politics and mellow nature is what they feel comfortable with rather than the stereotype of the strict, disciplined, rich job cutting businessman that Romney may be labeled. Romney is a smooth, disciplined polished candidate. But he has a critical flaw in that he could be seen as a ruthless rich businessman who got rich cutting jobs. During the 1992 election it was Bill Clinton’s mellow nature that helped him win against a well groomed professional incumbent candidate George Bush senior. During the 1960 Kennedy vs. Nixon election the more mellow person won. Same situation in 1964 in Goldwater vs. Johnson election. In 1968 it was a toss-up with a three way race. In 1972 the incumbent manipulated the economy to make it very prosperous thus allowing him to coast to reelection. In 1976 both candidates were mellow but Carter was a bit more smooth. In 1980 Reagan beat Carter because Reagan was Mr. smooth and mellow. In 1984, 1988, 1992, 1996 the cnadidate with the mellow factor won. Romney is improving on this but it is hard to change the image of the authoritarian businessman versus mellow Mr. Obama. In researching marketing and communication as a business owner I feel that Marshall McLuhan’s ideas on communication would support my theory that people will decide using the subconscious emotional effect of communication rather than use logic to vote for a particular candidate. Of course it is traditional for an incumbent president to lose his job during a period of high, persistent unemployment. Even if most voters have jobs they have still been hurt indirectly by the recession.

     I wrote an article “Iowa caucus may damage your portfolio”.

     Investors should seek independent financial advice.

http://www.mayflowercapital.com/blog/bid/75679/Iowa-Caucus-May-Damage-Your-Portfolio-Independent-Financial-Advice