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Four more years of the same?

With the re-election of President Obama what should investors do to attempt to take advantage of the opportunities that this creates?  At Greenberg Financial Group we are strong believers in Santa Ana’s quote about forgetting the past and thus, while every financial firm uses the disclaimer that “past results are not a good predictor of future performance”…..it is really the only thing we have to go on.  

Thus, we took a look at which sectors and areas performed the best during the last four years.  Taking into account that some of the performance was simply due to the global economy, and particularly the United States, coming off the worst economic performance since the Great Depression, we found  the best performers were: Large Cap US Equities, reflected by the Russell 1000 or S&P 500; certain segments of the Healthcare sector: large pharma & hospitals in particular; Global Consumer Discretionary [which is contrary to what one might think in a recession, consumer staples would normally be the best but in this recession the wealthy have continued to spend]; Swiss Equities; and Australian Equities. 

It is impossible to predict if these areas will continue to perform well for the next four years but we can try to analyze why they might.  Large US companies typically have a global footprint coupled with a weak dollar, low borrowing costs, and huge amounts of cash on their balance sheets position them to continue to deliver profits.

With virtually no changes in the US Congress it is probable that ObamaCare will be fully implemented.  This bodes well for hospitals (fewer unpaid patients) and pharmaceutical companies (more patients) but not so well for insurance companies.  The consumer around the globe will continue to spend as global economies continue to improve and developing nations demand more goods and services. 

Switzerland and the Swiss Franc will always be a bastion of safety and their publically traded companies cover many of the sectors that we think may do well (think Nestle and Roche).  It is expected that commodities will continue to do well under four more years of President Obama which is the Australian play.  Also China should begin to grow aggressively again as their government wants to increase the per capita income of its people, this means lots of building and raw materials which Australian companies are well positioned to provide.

This is not meant to be investment advice, simply global thoughts on areas of the economy that may do better than others.  The Author, Dan S. Martin is a Registered Investment Advisor with Greenberg Financial Group who regularly visits with clients and prospects in Europe from his base in Tucson, Arizona USA.



About the author: Dan Martin is an American citizen registered representative of Greenberg Financial Group (www.greenbergfinancial.com)

 
 
 
 
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