WILL 2011 BE OBAMA’S FIRST YEAR TO SEE A DOWN STOCK MARKET?
This is President Obama’s third year in office and the first two were great for stocks. While 2009 started sharply down, the market rallied impressively for a nice overall gain for the year. Likewise, the first half of 2010 was a bit choppy but the second half saw the stock market go steadily up for another gain. This year though, things are much the opposite as the market started out strong but has nosedived in the second half.
As I write this on 9/28/2011, it looks like this year could be the first time the stock market goes down in an Obama presidency. The economic challenges he faces here in America and abroad continue to mount and that does not bode well for his re-election chances. Please see the chart below which shows the Dow over the last 3+ years:
If you pay attention to the news you know that this is the beginning of the big push for both Democrats and Republicans in their year long fight for the presidency leading up to the 2012 election. The Democrats and President Obama will say that they are just getting started turning things around and they need more time. Republicans, on the other hand, will say that there has been more than enough time and all we have to show for it is a sputtering economy.
No matter which side you believe, if the stock market fails to recover it cannot be a good thing for Obama. After all, people do tend to vote with their wallets and when the market is down, people feel/are poorer and they don’t like it. President Obama is going to have a lot of challenging months ahead of him as he fights to keep his job and I’m sure he hopes the market helps him a bit by going back up.
As the stock market flounders here in August and September, the reason cited for it is often the frightening economic trouble in Europe. Greece and Italy lead the way dragging stocks lower over there and that makes investors in America jittery. The whole world is in financial crises and there is not much President Obama can do about that. Whether he has any blame for any of it is another debate, but this is definitely an inopportune time for the markets to be in such chaos, at least for him politically.
Anyone who is lucky enough to have money to invest and wants to learn how to buy stocks for the first time might want to wait things out for awhile. There is so much uncertainty everywhere you turn that plain old cash could be the best choice right now. The stock market really has no direction here and if anything at all, it is down.
