Now that the midterm elections are over and we have an idea of the direction our government may move in regards to immigration or health care, we wanted to take a look at some sectors we think may be affected by the results.
We think the Energy sector may see some changes for the better. We believe the Keystone XL Pipeline will be built, which in turn would lower oil prices. Right now the United States can only export liquefied natural gas. With a pipeline going directly to the ocean, we could see laws changing to allow for the export of oil. Oil services companies and refineries may benefit if this change were to happen.
The Healthcare sector has been going gangbusters for two or three years now, but we expect the sector to experience much slower growth, even with the aging population. We wouldn’t be surprised to see some restrictions on Obamacare. We have a good number of clients who are physicians. In talking with them, we see many doctors leaving the field early and fewer practices accepting Medicare.
After the recession, we saw strict regulations in the Financials sector. We hope to see a reduction in regulations, which in our opinion, would stimulate more robust growth for our economy, and perhaps alter our current monetary policy. We’d like to see interest rates increase, which would be good for savers.
All in all, the markets traditionally react positively to midterm elections. In the last 16 midterm elections, the following six-month period the markets posted a 16% positive return on average. From 1926 to 2006 the Dow Jones Industrial Average has increased 8.5% on average in the 90 days following a midterm election. Having a split party government with the President and Congress on opposite sides generally has little impact. However, the markets also tend to favor the third year of a presidency with a 16.5% gain. Keep in mind, the markets are also up two out of three times, so take these statistics with a grain of salt. Past performance is not indicative of future results.
If you have questions regarding your investments for the future, the experts at Henssler Financial will be glad to help:
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Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
