Calming Down?

I predict that after tomorrow (election day), the stock markets will begin to show calmer action and finally begin to form a reasonable base. My reason is simple: we won’t be as subject to the end-of-the-world, gloom-and-doom scenarios we have been enduring in these weeks, months, and years of political mayhem. A great deal of the panic-induced choppiness will begin to be eliminated, and both investors and traders will begin to make reasonable decisions again.

I think that the markets will respond more favorably to a McCain win than to an Obama win, but that’s just me. The markets will tend to better understand and digest McCain’s proposals. Obama’s policies remain largely unformed and, therefore, present a higher degree of uncertainty. On the other hand, the markets appear to be responding favorably now to government-imposed “solutions” to the economic “crisis.” Either way, I still think that we will begin to see and experience narrower price swings in the markets.

All of these views are predicated on the assumption that there is no new major catastrophe – natural or man-made – that afflicts us at home or abroad. Any such incident is going to naturally cause a disruption in the markets.