Markets Usually Rise After Top Two Candidates Emerge

by Louis Navellier | January 10, 2012 12:34 pm

Historically, election years are good for the stock market. If history repeats, the market will rally right up to Election Day in November. When we get down to the top two major presidential candidates (probably Mitt Romney and President Barack Obama), they typically will promise to do whatever it takes to get elected. This helps boost consumer and investor confidence. There will be some negative ads, but, in the end, the most positive person wins. So, with that said, I predict the presidential candidates will continue to smile and make “happy talk.”

Each time a new Republican front-runner emerges, the media tries to dig up new dirt on him, but I find it amazing that the media can’t seem to find any dirt on Mitt Romney. I met Mitt once on the set of CNBC, and I have to say I think he is an impressive person. He seems to be as close to being Ward Cleaver as anyone who ever ran for president thanks to his seemingly ideal family and accomplishments. I still am waiting for The New York Times to find some dirt on Mitt, but so far, nothing material has emerged.

Of course, Obama also has a nice family and has charmed voters with his positive messages of hope. I expect Obama will present a message saying he saved us from a Great Depression and has led us back toward economic growth in 2012, so he deserves to be re-elected.

Mitt Romney will say Obama might be a nice guy, but he is not well-informed about free enterprise in general and the U.S. economy in particular. Throughout 2012, Romney will tell voters that he wants the U.S. to be an innovative entrepreneurial society that creates jobs and is No. 1 in the world, not an entitlement society that emulates Europe’s crippling public service worker’s pension crisis.

Obama won in 2008 because of his inspiring rhetoric of “hope and change.” In the end, the candidate with the most inspirational message will become our next president, since most Americans want a cheerleader for the U.S. economy. Right now, I believe Romney has the upper hand on Obama, who keeps blaming rich folks and the GOP opposition in Congress. Even though I predict Obama will reinvent himself as a positive inspirational person, I believe Romney — who seems to resemble a cheery game show host — has the best chance of defeating Obama because he will seem more positive and inspirational.

If the polls continue to show that Romney holds a significant edge over Obama, I suspect the stock market will rally in anticipation of having a pro-business leader in the White House in 2013.

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