How much of this years sell off.......

Started by Michael Koons, 12/20/2008 04:27AM
Posted 12/20/2008 04:27AM | Edited 12/20/2008 04:06PM Opening Post
if any do you think was due to the likely election of a new President who would likely raise capital gains rates to a more historical level, ie 26 percent or so??
Posted 12/20/2008 02:59PM | Edited 12/20/2008 03:31PM #1
0%

Capital gains tax is no longer an issue, since no one has any capital gains to speak of. Besides, you don't get an epoch-shattering selloff in response to something as mundane as going back to historically normal tax levels, unless the recent market performance is well in excess of historical norms and attributable mostly to low capital gains tax -- and over the course of the last year, the market's performance has NOT been that stellar, in fact it has been much worse than average.

The market peaked back in '07 -- the bear market and the housing crisis, which spawned all the subsequent economic crises, were well underway by the time the election season came into the final stretch.

Moreover, stock market performance excluding weapons and oil is typically much stronger under democratic administrations than republican ones. If investors wanted to engage in political speculation, they might rotate out of oil and weapons and into technology, but engaging in an outright selloff for political reasons would be fighting against the history.

The market required no political speculation to go into the tank. The real performance under the existing administration was sufficient.

But nice try. wink