New Opportunities

Author: By Dan Searles & Tom Hardie
Posted: Monday, February 23, 2009

As we write this column, our nation has just sworn in a new President. Many are hopeful that he will bring changes that will help our economy. Others are concerned that the economic change he brings will lead to even more government regulation and failed social programs.

On whichever side of the fence you fall, all Americans can be proud that America is now, more than ever, the land of opportunity, where anyone with a good mind and a good education, no matter their race, sex, creed, color, or religious background, can rise as high as their skills and God-given talents allow. We are not quite at the point Martin Luther King, Jr. wanted us to be – where every person is judged not by the color of their skin, but the content of their character – but we are much closer than many cynics and naysayers have thought.

With this overview in mind, let’s go to the question of the month…

Q: “I’m not happy about the new Obama administration because I am afraid he will cause more government spending and this will stifle private industry job growth. Where do you think opportunities, if any, will arise in the stock and bond markets in the  Obama Administration?”
Signed, Skeptical

A: Dear Skeptical: Every presidency has its take on where the economy and this nation should go. However, with our checks and balances system of government, no one man or branch of government controls it all.

We elect a President and, thank goodness, don’t inherit a Czar. As a result, each branch of government fights and scrapes to come up with a compromise position. Therefore, we don’t get all the government we pay for.  Therefore, I think most of President Obama’s changes will be “middle-of-the-road” changes, which, in my estimation, is how it should be.

The Obama administration has said it is interested in promoting alternative energy, promoting higher gas mileage in transportation, reconfiguring the health care sector, and growing the overall economy. Somewhere in that mix is opportunity. The question becomes, as always, “Which ones will provide profits?” To this, no one knows the specific answers.

That’s why investing in stocks and bonds has risk. Keep in mind four key considerations: diversify your portfolio through many categories to help reduce volatility; plan to stay in the market for the long-term (five years or more); consider protection strategies for your stock and bond retirement accounts to help manage losses where appropriate; and finally, if you insist on buying individual stocks, “Buy what you know,” as Peter Lynch, former manager of Fidelity Magellan Fund, suggests.

Dan Searles, CFP, is a financial planner and a Registered Representative offering securities and advisory services through National Planning Corporation, member FINRA/SIPC, and a Registered Investment Adviser. Medallion Financial Group and NPC are separate and unrelated companies.
* National Planning Corporation does not endorse the opinions expressed in this column. The information here is not to be considered as financial, tax or legal advice. As with any financial, tax or legal matter, consult your qualified adviser before taking action. No investment strategy can ensure a profit or protect against a loss. As always, past performance is not indicative of future results.

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