Investing in 2012, an Election Year

Posted at 12:03 PM, Jan 12, 2012
and last updated 2012-01-17 14:14:53-05

RICHMOND, Va. (WTVR) - Sandy Wiggins, co-owner of The Actuarial Consulting Group, a strategic financial planning firm for individuals and businesses, discusses "Investing During an Election Year."

Wiggins made five appearances in 2011 to discuss investing in a volatile economy. Now he discusses Election Year trends.

The stock market experienced severe swings during 2011, and this volatility had a significant impact on the Standard & Poor’s (s&p) 500 index.  According to a recent Bloomberg report, the index has experienced the smallest price change in 41 years.  Despite the fact that the S&P index gained very little in 2011, it was one of the most volatile years on record for the stock market.

But did you know that the election year is typically a good year for the stock market?

Wiggins said that strategists that participated in a recent USA Today report predicted that the stock market will finish the year up more than 10 percent in 2012, but how much the financial markets and economy will improve is, of course, have yet to be determined.

Historically the Standard & Poor goes up about 8 percent and the fourth year of the presidential cycle is the second best for stocks.  Wiggins said statistics for that info goes back to 1900.

“The election year is often a respectable one for stocks because the administration is very focused on trying to stimulate economic growth,” said Wiggins.

“This year, however, investors will want to know how the country will deal with its own fiscal problems and how it will trim its $15 trillion deficit, but not impede the still-fragile economic recovery,” he said.

Many Wall Street pros say legislative gridlock might even be good for the markets, because the gridlock means major decisions on deficits and tax policy will be postponed into 2013, after the election.

Click on the video above to hear Wiggins talk about the positive factors for the markets.

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