Nine months ago, when I wrote
If McCain Wins, So Could These Funds
, Sen. John McCain was locking up the Republican Party nomination. Since then, the
Dow Jones Industrial Average
has lost 22% of its value while the Nasdaq 100 has tumbled 24.5%.
Two of my three McCain fund picks did worse than the market, with
Fidelity Select Defense and Aerospace
off 31%, and
PowerShares Aerospace & Defense
down 30.59%. A surprise victory by McCain could put stock holdings of
(HON - Get Report)
, minus 46.6%;
, down 18.7%;
(BA - Get Report)
, a decline of 33.2%; and
(GD - Get Report)
, a drop of 26.7%, back in favor.
The one McCain pick to outperform the market, falling just 1.81% since early February, was the
SPDR S&P Biotech ETF
. Back on Feb. 8, McCain had yet to select a running mate. Former Pennsylvania Gov. Tom Ridge recently explained that McCain could be winning Pennsylvania if McCain had selected him.
Instead, McCain, needing to energize the Republican base, selected Alaska Gov. Sarah Palin. While this has excited right-wing social-values voters, a Vice President Palin might do the "mavericky" thing and work to defeat the support of cutting edge, scientific companies. So, in a McCain victory, SPDR S&P Biotech is now off the list, but the defense funds remain.
Also since February, when I selected
Funds That Could Profit From Clinton, Obama in Office
, the bullish picks for Sen. Barack Obama of
PowerShares Wilderhill Clean Energy Portfolio
fizzled 54.5% and
PowerShares Dynamic Building & Construction
Likewise, my bearish picks of
iShares Dow Jones U.S. Insurance Index Fund
crashed 47.4% and
SPDR Pharmaceuticals ETF
shrank 14.5%. While the bullish picks have been trashed so far, they are well-positioned to catch a rebound in the first half of 2009 if Obama gets sworn in on Jan. 20.