There are several topics that are generally considered to be inappropriate for social gatherings involving strangers. High on the list are politics, religion and grandchildren.
Never-the-less, it is important for investors to be current and fully aware of what is going on regarding both politics and religion. It is also essential that investors distinguish between their personal philosophies and the investment implications. Consider several recent events that are essentially political but likely to have both a near term and perhaps a longer term impact on markets and individual stocks.
- Canada has elected a new Prime Minister that campaigned on a promise to significantly increase deficit spending.
- After some seven years, the administration has decided against the Keystone pipeline.
- A response to a question during a recent presidential debate triggered a run on Bio Tech shares.
- Congress is currently considering legislation that would probably further politicize the Fed.
The list goes on and there are almost continuous new additions. Successful investing requires maintaining an awareness of what is going on and how proposed changes might affect portfolio values.
Investors should also be aware of the potential impact of religion, particularly in light of what appears to many to be a major religion based war, largely in the Middle East, but clearly spreading.
On a cheerier note, bragging about your grandchildren is unlikely to affect the stock market.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®