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October 03, 2012 at 11:30 AM
Even before the first presidential debate on Wednesday night, experts suggested that the health care sector, as well as dividend-bearing stocks, among others, offered good opportunities regardless of who goes to the White House in January.
Participants in a Web roundtable discussion titled “Investing and Politics,” sponsored by Janus Capital Group, offered a variety of tips for advisors and investors based on their perception of the coming presidential election and the world economic situation.
During the discussion, which ranged widely from comparisons of the present state of the economy to the 1970s and 1980s and the role government policies and confidence play in the country’s economic health, speakers touched on everything from the size of the national debt to the need for food to remain at an affordable level.
Hosted by Richard Weil, CEO of Janus, the discussion was moderated by Stephen Moore, senior economics writer for The Wall Street Journal. Its panelists were Peter Atwater, president of Financial Insyghts; Jonathan Coleman and Gibson Smith, co-chief investment officers for Janus; and John Taylor, the Mary and Robert Raymond Professor of Economics at Stanford University and George P. Shultz Senior Fellow in Economics at Stanford University’s Hoover Institution.
Asked for specific recommendations for advisors and investors, Smith said his biggest concern about the election and the future is the divergence between technicals and fundamentals. Liquidity in the markets, he said, is causing a bigger divergence. He also expressed concern about the credibility of central banks with regard to quantitative easing policies.
Coleman pointed out that an Obama re-election would likely result in the Affordable Care Act providing a volume increase for insurance companies and resulting in a likely taxation issue. On the other hand, a Republican victory would likely see a repeal of the ACA’s subsidies and exchanges, which he said would reduce the flow of individuals into exchanges and limit the impact on that sector.
He cautioned investors to consider the economic environment when choosing investments, and said that “strained resources and a more challenging environment” could offer opportunities in companies that help control costs in healthcare systems, such as pharmacy benefit managers engaged in limiting the growth of pharmacy costs. “Novel therapeutics” that target such problems as hepatitis C and similar diseases would also offer promise, “regardless of who’s elected.”
