Wednesday, January 21, 2009

Obama Effect? Look Towards Congress Instead

The upcoming stimulus plan will, without a doubt, have an impact on the markets. We saw the greatest point drop in history for the Dow Jones Industrial Index when the 700 Billion dollar Troubled Asset Relieve Program (TARP) bill did not pass Congress. And then we saw huge upswings when the bill was revised and passed. Investors everywhere are looking to President Obama (feels nice to not have to say President-elect anymore) to see how the stimulus plan will shape up. Investors are looking to invest in companies who will receive business from the stimulus plan, and therefore are following President Obama's every move.

So how important is Obama to the stimulus plan, and therefore your investment? Not that important. If you are following Obama's every word to try and gain some early insight on when the stimulus bill will be passed, you will not gain much information. Instead look at Republican leaders in the House and Senate. Most people forgetting that Congress will decide the fate of the stimulus bill, not President Obama, so they are not looking in the right direction. Follow what GOP leaders are saying, because they are the ones who will be the ones stopping the bill from passing. Depending on what the GOP leaders are saying, you will be able to tell if the bill gets passed or not.

Right now, it seems that GOP leaders are not opposed to spending money, but opposed to HOW the money in the stimulus bill is going to be passed. House Appropriations Committee's ranking Republican member Jerry Lewis, R-Calif., has said that Republicans are ready to vote against the bill if they are not satisfied with how the money will be spent. Republicans will be working with Democrats to get a bill that both agree on, but it might not happen quickly.

The following days will be critical to follow, make sure you are following what Republican congressional leaders are saying about stimulus bill, if they are satisfied or not. This will give you great insight on whether it will be passed or not, so you can adjust your investments accordingly.

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