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There has been some speculation lately about what kinds of stocks would benefit under either a Barack Obama administration or a John McCain administration. Now that question is getting closer to being answered. However, it is also important to look at other effects that a Barack Obama presidency might have on your investments. And by that, I mean taxes.

CNN Money has great coverage of the main points of the Barack Obama economic policy. While we’ll still have to wait to see what actually happens and what is sacrificed to political expediency or to reality, it is probably a fairly safe bet that proposed taxes on investments will go through. The country needs the revenue.

Taxes on investments

There are two main taxes on investments that will likely be seen in a Barack Obama presidency:

1. Tax on carried interest. Right now, tax on carried interest is seen as an investment for tax purposes. This could change under Obama. Instead, this carried interest would be taxed as income, automatically subjecting it to a higher tax than the 15% rate that exists on investments.
2. Raise the capital gains and dividend tax rates. While #1 is unlikely to affect much beyond hedge funds and private equity, capital gains and dividends may affect retirement savings. However, the rate is to be raised to 20% from the current 15%, and only on couples making more than $250,000 and singles making more than $200,000. So if you make less, little is likely to change in terms of your retirement account.

Your retirement investments

Of course, your retirement account is made up of investments. Obama wants to provide a match on retirement savings for families that earn less than $75,000 a year. It’s a nice thought, but this is probably something that falls by the wayside, since funding it will be tough.

As always, though, it is up to you to do what you can to make the most of any situation. No matter who is president, you bear ulitmate responsibility for your decisions — and the success they bring you.

Today, on Election Day, the stock market is seeing gains. In general, investors are looking forward to this election because, whether Barack Obama or John McCain is elected, there will be a change in the way things are done. And both presidential candidates have shown their commitment to Wall Street (no matter what they say in stump speeches), and the general feeling is that either one could help things go better for the stock market, investments and the economy.

Of course, there is speculation that either McCain or Obama could be better for investing. Democrats point out that historically, the stock market does better when their party is in charge. Republican counter that they set the stage and Democrats reap the credit. Personally, I think that since the stock market tends to gain over time, neither is going to have a big impact on the long-term performance of the stock market. But their policies could affect which individual stocks gain and which lose.

Picking Obama stocks and McCain stocks

Consider:

• If Obama wins, then there is an argument for more alternative energy funding. McCain says he will fund alternatives, but he seems mostly focused on nuclear as the alternative. So, if Obama wins it is possible that we could see a gain in alternative energy stocks, especially wind and solar power stocks. Additionally, social funds may see an increase in value.
• If McCain wins, we are likely to see a boost in funds that hold tax-advantaged dividends, as well as nuclear energy companies and resource companies. I also expect that companies that provide armament and other military supplies would get a boost from a McCain victory.

BloggingStocks has a very interesting list of individual stocks and funds that might be good choices, depending on who wins. It is definitely worth checking out.

And, whether you are voting with your wallet or voting for some other reason, remember to get out and VOTE.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Right now, there is a great deal of lobbying going on by people who want access to the $700 billion bank bailout. Indeed, GM and Chrysler were hoping for a piece of the pie to help with a merger they are trying to put through. See, since both GM and Chrysler both have financing arms to help customers buy cars, they think they should have access to the money. (And one has to admit that they have a point.)

At any rate, they’ve been told that they are not getting access to any of that bailout money. After all, the government, before passing that $700 billion behemoth, provided a $25 billion bailout loan to the auto industry as a whole. Maybe GM and Chrysler should go after that money.

In the meantime, though, perhaps it is time for the two companies — along with Ford — to start rethinking their business model. Peter Cohan points this out on BloggingStocks:

I think that the industry’s best short-term hope is that plummeting gasoline prices bring people back to the showrooms for those popular gas guzzlers that fueled the auto industry profits earlier in the decade. Unfortunately, that would lead them to defer again the decision to build a new breed of electric-powered vehicle that does not ship hundreds of billions of dollars worth of our money, in the form of gasoline payments, to people who don’t like us very much.

The problem is that the Big Three were lulled into a sense of security. Their efforts at lobbying kept lawmakers from forcing any real change on them, and they continued with business as usual. Meanwhile, with the economy in a shambles, it is evident that many consumers are, well, no longer consuming as much. And that means cars as well as other items. Perhaps the Big Three need a little help. But first the auto industry should show us a viable plan for retooling the business model and the products being offered.

Tags: $700 billion bailout, stock market news, auto industry, GM Chrysler merger,
economy, investments, bailout