In a previous column we’ve discussed whom you should choose as an investor between Hillary Clinton and Donald Trump.
But now, with the Democratic and Republican nominee races getting cut all the way down to 2 and 3 candidates respectively, I think it’s time to look at which 1 of the entire group would be the best for the stock market.
I’ve done the homework already, I’ve checked the facts, and I’ve come up with a conclusion – one that will likely well surprise you…
Let me be clear about 1 thing before we get started: This isn’t an endorsement of any candidate nor is it anything other than a discussion regarding the impact these presidential candidates could have on the stock market alone.
But with that being said, let’s dig in.
When we covered this topic between Trump and Clinton, here’s what we ended up with…
“So in essence, the question about Trump’s impact as far as investors are concerned should be whether his pro-business agenda will have the momentum to push the economy into a state able to handle the long-term issues, and how his agenda will be paid for…”
And,
“The question about Clinton’s impact on the markets as far as investors are concerned is, will Clinton’s easily processed policies and largely hands-off approach to the market benefit us, and will she remain objective after taking special interest group money?”
Democratic candidate Bernie Sanders has a number of ideas that keep him from anywhere near the top of the list as far as this discussion goes, so I won’t waste any time there.
Moving on to GOP candidate Ted Cruz, his more radical economic ideas, including relatively sharp tax proposal, could lead to hundreds of billions of dollars being added to the deficit.
Plus, Cruz is another candidate like Trump who could have trouble working with Congress. He’s already disliked by politicians from both parties after leading the government shut down in 2013.
Now here’s why the GOP may be looking to John Kasich to be the savior…
First of all, Kasich is the only GOP candidate who will beat Clinton in a presidential race according to current polls. Trump loses badly and Cruz also faces defeat.
That alone could be enough to earn Kasich the nomination should the party have to go beyond the first ballot.
And here’s why that could be the best-case scenario for the stock market…
1. Kasich knows the ins and outs of Wall Street after his time as an investment banker with Lehman Brothers.
2. His 6 years as chairman of the House Budget Committee shows that he can work with Congress in brokering deals.
3. Kasich’s pro-free trade stance (with some nuances, such as wanting better agreements) should also help to improve American business, and thus the market.
4. His track record as governor of Ohio speaks for itself. He was able to turn an $8 billion state budget shortfall into a surplus through unpopular cost shifts and spending cuts, all while lowering the income tax rate. That shows his willingness to do what is necessary and right even when the masses aren’t behind him completely.
And all of the above could be exactly what this current stock market needs. With Janet Yellen and the Federal Reserve happy to tinker with natural market cycles in the hopes of saving face (although some Fed members are contradicting Yellen’s decisions), the inevitable thrashing the market is up against could only be getting worse.
The good news as it relates to the stock market is that there’s a candidate out there who appears to be willing to take the necessary bad in order to get to the potential good. That attitude makes the market more predictable, allowing you and I to profit easier.
The bad news is that Kasich looks to be the furthest from the White House in this race right now.
But whether it’s Kasich or any other nominee, we’ll be here to keep you informed on how it’s going to affect your investments.
Thank you