If you think the economy is weak now and have hope Barack Obama will change things, think again.
You'll be in for a nasty surprise by this time next year.
New Threat: The 'Obama Market'
Of course, simply noting this will inspire charges of fear-mongering!
As if investors didn't have enough to worry about, a new land mine is lurking: "the Obama market."Read the rest and watch your wallet.
That's what I heard over the weekend from a veteran investment adviser, Charles Allmon. "Political ramifications represent a significant added market risk that should not be ignored," he says.
Initial polling suggests that Senator Obama will be the next president, a view Mr. Allmon shares. An Obama presidency is certain to mean a big tax increase, he says. He also points to the likelihood that the senator will seek to raise the marginal tax rate to 52% from 39.6% and hike the capital gains tax rate to at least 25% from 15%.
"He'll cause more damage to the stock market and even make Jimmy Carter look good," Mr. Allmon says. "Senator Obama is leading a children's brigade, but the problem is children shouldn't be leading this country."
Wall Street, they say, is a young man's game. Try telling that to our 87-year-old worrywart, who has been doggedly tracking the stock market for more than half a century and who offers a compelling argument that money managers in their golden years still have the brain power and analytical savvy to strike gold.
Mr. Allmon, who manages about $200 million of assets — individual, pension, and profit-sharing money — is outperforming this year's crummy market, with a modest gain, he says, of between 1% and 2%. He attributes this showing to a conservative investment strategy, notably huge cash reserves (currently at 80%).
"You have to be crazy not to be conservative in this kind of market unless you're willing to take a bath," he says.
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