Dec
23
How Obamanomics will Impact your Portfolio
December 23, 2008 | Leave a Comment
The federal government has never had as large a role in the economy as it now does. Barack Obama will have more power to influence markets than any other leader in history. He is coming to power during a massive recession, as housing prices and markets crumble, and the federal government is printing money like crazy to try to pay its bills.
According to Bloomberg News the cumulative federal commitment to financial rescue initiatives has reached an astounding $8.5 trillion. Additionally, Obama announced last week a fiscal stimulus package totaling $1 trillion over the next year.
With such tremendous money transfers it is more important now than ever to understand how government policy affects your portfolio. In effect, these policies strip wealth from taxpayers and redistribute it to political beneficiaries.
Government policies affect all areas of the economy, starting with our currency, interest rates, and the money supply. At a fundamental level, policy creates winners and losers. Companies that benefit from policy prosper at the expense of those who do not, but are charged with subsidizing the rest through taxes. My book, “Obamanomics: A Guide to Investing Over the Next Administration” gives specific strategies on how to protect your assets and make money on policies we know Obama intends to pursue.
Expect union-heavy industries-like automotive, airline, and steel-to prosper as taxpayers assume the burden of employee health care and trade policy changes to protect domestic businesses. Stay away from the defense industry as both the War in Iraq scales down and long-term acquisition programs are cut. But look towards “green” businesses, carbon-efficient utilities that will benefit from cap-and-trade emissions regulation, and alternative sources of energy that will have wind-fall piles of cash thrown their way.
Don’t get caught on the wrong side of the policy game-read “Obamanomics: A Guide to Investing Over the Next Administration.” (www.learnobamanomics.com/book)
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