This Day On The Street
Continue to site
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

Post-Election Selloff Is No Surprise

This article originally contained the wording, "Women of any race preferred Obama." A majority of women voted for Obama, but a majority of white women voted for Romney. TheStreet regrets the error.

NEW YORK ( TheStreet) -- The market selloff Wednesday seems to have taken everyone by surprise and as a consequence looks much worse than it is. You see a wave from a distance, it's easy to be analytical about it. Riding one -- or more to the point, wiping out on one -- creates a completely different perspective.

But here's the thing: The selloff was entirely predictable, a function of pure investor psychology.

First, a few basic assumptions. One, most investors are upper middle class white men. Two, most upper middle class white men, particularly those with a sizable investment, were Romney supporters.

Before you jump all over that voting booth generalization, let me just say, in my defense, it's not conjecture. The Christian Science Monitor pointed out that 59% of the white vote went to Romney and more white men than white women voted for him.

I'm not here to rehash politics, but all that makes perfect sense to me, on a partisan level, on a social level and, yes, on the level of crass race and gender consciousness. Intuitively, it just fits: Wall Street, white men, Romney.

In addition to being investors, these white guys -- us -- are also human beings with irrational biases. We look to a candidate expecting to see what we see when we look in a mirror. And if that image, the one that looks like us, tells us, "I can make it easy for you to get rich" -- my friends, the tendency is strong to believe.

Investors see themselves getting exactly what they want. They see their avatar, Mitt Romney, white male millionaire, carrying the day so that can happen.

Mind you, no matter who won, a rebalancing would have to take place. A portfolio that is waiting, that is anticipating Democratic fail, is not a long-term plan and everyone knew it.

Had Romney won, the rebalancing would have involved a lot more happy buying -- because Romney is the avatar of the upper middle class white male investor, and he's brandishing a simple solution to make us all rich.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $117.91 -0.13%
GOOG $700.12 0.64%
TSLA $212.00 -4.70%
YHOO $36.95 2.60%
AAPL $92.98 -0.69%


Chart of I:DJI
DOW 17,642.77 -8.49 -0.05%
S&P 500 2,048.97 -2.15 -0.10%
NASDAQ 4,720.2720 -5.3670 -0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs