Which of the following issues will be most important to you when it comes time to cast your vote in November?
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Hot-Button Election Issues & Your PortfolioSeptember 8, 2008 By Jamie Dlugosch, Contributing Editor, Investors Insights |
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Issue #4:
America’s Place on the World Stage
The days of pre-emptive foreign policy end with an Obama administration. He supports a plan to end the war in Iraq while aggressively pursuing those that wish us harm like Al Qaida. He believes in using all elements of U.S. power in dealing with the international community. That includes more diplomacy and less saber rattling. He is open to discussion without preconditions with current enemies like Iran. He will also work to keep America safe from terror attacks by promoting protection of chemical plants and nuclear facilities.
Analysis: The war in Iraq has been an incredible burden on this country in treasure lost and human lives sacrificed. While it is impossible to measure the value of good world standing, it’s clear what a lack thereof means for our economy. To the extent we can rebuild that standing, American corporations should benefit. Also, less spent on the war will help reduce our budget deficit.
Net Stock Impact: Bullish
Retreat means defeat according to McCain. He does not favor a reduction in troops in Iraq until its people can defend and support their own democratic institutions. No matter how long or how expensive the job, victory must be attained. From his speeches, it would appear that McCain would continue the forceful foreign policy of the current administration. He has the resolve to lead the country against those that would destroy us and is committed to a strong military at home and abroad.
Analysis: In order to fight the enemy, America must commit resources to McCain’s plan. Such spending does not bode well for our deficit and may further alienate a world already suspicious of our actions. As a result, we may face increasing borrowing costs to fund our effort and further weaken the economy. The impact overall will be negative in the short-term. Is that a price we are willing to pay?
Net Stock Impact: Bearish
