This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Seeking Stocks Beyond Washington's Reach

This post appeared Tuesday on RealMoney . Click here for a free trial, and enjoy incisive commentary all day, every day.

At the start, I will admit to being a political junkie. I follow elections as if they were baseball games, complete with snacks and adult beverages. The electoral and legislative process fascinates me, usually in its absurdity. What I am not a huge fan of, however, is when the markets become overly politicized. Politicians will always have some impact on the financial markets, since they set economic and regulatory policy, but the current environment is reaching the point of the ridiculous.

Government influence and participation in the markets is at a level I have never seen in my career. It seems that every day the president or a congressional leader makes a speech or remark that changes the direction of the market.

New regulations are coming from every level of the government, and this is changing the structure and mechanics of the market itself. It complicates the process of picking stocks and choosing investments to build or protect capital. In addition to understanding valuations and finance, you need to be able to guess what the federal government might do and how it will affect your decision.

The scramble to fix the financial crisis and also fix the blame is creating an increasingly anti-business climate. It is coming from both sides of the aisle as well as from various federal agencies and the Treasury. The threat of new regulations and taxes is making business very hesitant to expand or invest for an uncertain future. Add in the various poorly thought-out, highly politicized green energy policies, and it becomes very difficult to pick investments for the long term.

To avoid the possible negative consequences, an investor needs to stay away from industries that have heavy regulation or government involvement. This rules out banks and other financial institutions almost entirely. Many of them are cheap on the numbers, and ordinarily I might consider them a screaming buy. I have been very cautious to act with these stocks, and government regulations and policies are among the biggest reasons for my caution.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs