When Barack Obama was elected US President in November of 2008, the US economy was going through rough times. The stock market had recently witnessed the most significant losses since Black Friday in 1929, jobs were being lost, and things were very unstable overall. Suffice it to say, Obama had is hands full when his administration took over. One of the biggest concerns on the minds of economic experts and financial analysts was how would his administration affect the economy, especially where investing in the stock market was concerned.
An economy in crisis
Strengthening the US economy became one of Obama’s priorities the moment he stepped into office in January, 2009. The state of the US economy combined with credit freezes were the biggest challenges that he faced where the overall economic picture was concerned. These issues had been festering for quite some time and it was obvious that they wouldn’t be fixed overnight.
Long considered to be the backbone of the US economy, the credit and lending industries witnessed some relief and realized some stabilization based on the economic bailout and the cash infusion that it provided. Regardless, the economy is slowly recovering, but is the recovery too slow to undo the damage that has already taken place? As a result, the economy is in a slow settling stage, which most likely will continue for quite a while.
The effect of the administration on the stock market
Many individuals lost their 401(k) plans as well as other retirement and non-retirement accounts as a result of the stock market crash that occurred prior to Obama’s election. Some brokerages and day traders have benefited from the current volatility of the stock market. If you have long term investment goals for retirement, this volatility may be providing individuals with an excellent buying opportunity based on the drops in values.
Market volatility is not going to decrease anytime soon and whether or not this can be attributed directly to the Obama administration remains to be seen. However, investing through what is called “dollar cost averaging” you might be able to take advantage of how this has affected the current markets. Additionally, you will have an opportunity to invest in stocks while their values stay lower. Eventually, the market will stabilize and things will hopefully return to normal soon.
How the above can affect a person’s finances
The quick and simple answer is that American’s won’t be affected much overall, at least for the short term anyway. Changes will most likely be slow to take effect which benefits the investor and their finances. In other words, it gives the investor time to adjust their portfolio and their personal money management. This enables you to take advantage of changes in policies that you could benefit from.
You will also be able to prepare for specific tax changes should those occur so that they do not work against you and your investments. Regardless of the presidential administration that is in power, you should always practice good money management methods and skills.