Politics/Investing

Over 80% of what candidates promise, never come about.

It's an interesting idea - I'm sure it will have an impact, though I'm not sure how dramatic it will be.

However, I expect that you're not alone in considering this, and that certain stocks will rise or fall gradually before the election in anticipation of the consequences, decreasing the gain/loss of specific securities. The more predictable the outcome, the less dramatic your profits will be when things turn out as expected.

There might be a more profitable opportunity to cash in on false expectations - given that the prices of certain stocks will be affected by expectations, the prices (that gradually adjusted over the preceding months) will snap back to "normal" if those expectations don't pan out.

Given your example, the price of H&R Block will decline gradually as Obama's chances are perceived to increase, such that if he is elected, most of the loss will already be reflected ... but if another candidate wins, especially if it's a surprise victory, the price of the stock will rebound after the fact. I expect that will be faster and more dramatic, so hedging your investment would be wise (maybe even setting up a straddle to cover both possibilities).

I'll concede Lucky's point about campaign promises - there's a huge difference between what a politician says on the campaign trail and what they do in office. Aside of the dishonest nature of the political game, the President has to work through congress to get legislation passed, and that's generally where even the most sincere of intentions gets smothered.

It might also be an idea to look at who owns each candidate - the companies that put money into the candidates' pockets, to whom they will be beholden once they are elected. Regardless of their public claims, politicians will serve their masters (especially during their first term, when they know they'll need their support again), and the companies that buy Presidents also buy senators and congressmen so that they can influence the entire process.

One thing for certain. If Dems get the Presidency and maintain control of the Congress, look for higher taxes for businesses and 'upper income' individuals (>$80K). Also look for windfall profit taxes on oil companies and the elimination of the tax advantages for domestic drillers. Also look for a substantial increase the capitol gains tax. Oil company and domestic drillers will be hurt the most. I am no expert on health care, but if they pull off some nationalized health care program, I would guess that would not be good for insurance companies.

On the plus side, look for the Democrats to provide nice tax breaks and carbon credit programs that will pump up solar stocks and other alternative energy stocks.

At least my two cents.