Politics

Get Some Sleep on November 7th

By, 10/07/2006

While pundits, the press, and pollsters pine away for results of the US mid-term elections deep into the night on November 7th, we'll be tucked in for a long autumn slumber.

These elections are nothing to fret over. To drive ratings, the media giddily reports possibilities for sweeping change as Election Day approaches. Promoting change and uncertainty is a great way to sell media content, but a big shift isn't probable. The most likely outcome features the GOP retaining both houses, but by narrower margins. No matter who's in charge, a thin majority for either party means a gridlock scenario—that's bullish for stocks. US markets are already beginning to realize it, treading higher in recent weeks in spite of the recent Mark Foley/GOP sex scandal mess.

Stock markets do not care which political party has power. Markets' main concern is changes leading to the redistribution of wealth, which they abhor in the short term. Even if the Democrats were to capture a chamber, neither side would possess enough power to pass major legislation in the next two years. Lacking potential for any major regulatory shifts, risk aversion will wane and markets will be freer to move upward.

This election is a yawner, so get some sleep on election night.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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