Monday, December 22, 2008

How Obamanomics will Impact your Portfolio

By Rob Viglione

The federal government has never had as large a role in the economy as it now does. Barack Obama will have more power to influence markets than any other leader in history. He is coming to power during a massive recession, as housing prices and markets crumble, and the federal government is printing money like crazy to try to pay its bills.

Boomberg News reports that total federal commitments to financial rescue efforts have ballooned to $8.5 trillion. Despite this enormous transfer of wealth, Obama recently announced another $1 trillion stimulus package he intends to push when he assumes the presidency.

The magnitude of these cash flows is enormous. Policy drives markets now more than ever. The larger the role government plays in the economy the more imperative it is to understand how policies affect investments.

At the macro level, federal policies affect the dollar, interest rates, and growth or contraction of the money supply, i.e. inflation or deflation. At a lower level, direct transfers of wealth benefit the companies that are on the receiving end, and harm those from whom profits were taken. "Obamanomics: A Guide to Investing Over the Next Administration" (www.learnobamanomics.com/book) helps you understand exactly how Obama's policies will affect your portfolio.

The book discusses how Obama's policies will influence specific areas of the economy, and how you can profit from it. For instance, Obama is strongly pro-union and will push legislation that benefits organized labor, and union heavy industries. Think automotive, airline, and steel, to name a few. Additionally, stay clear of war profiteers, as cash flows dry up with America's draw down in Iraq. Look for "green" companies that will benefit from the quest for clean energy and a carbon cap-and-trade program.

Investing is part art and part science, but using all information available to make intelligent decisions can tip the odds in your favor. Don't let yourself get caught on the wrong side of the policy game, visit www.learnobamanomics.com and read my book. - 15224

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