While Doll says the outcome of the election is unlikely to impact on market performance as much as many believe, he says the effects of a victory by the Republicans may have already been priced into the markets, as many are marginally predicting a Bush victory.According to Doll, a win by either candidate would benefit certain groups of investors. Equity investors could stand to benefit the most from a Bush victory, mainly because of his plans to privatise social security, which could direct more money into equities and raise stock prices. “Bush’s policies of reducing capital gains and dividend tax rates clearly favour equity investors, while Kerry’s plans would reduce after-tax returns for equities,” says Doll. On the other hand, Kerry’s plans to reduce the fiscal deficit would benefit fixed income investors, says Doll. He also predicts that bond investors could prosper under Kerry’s tax plan. “Tax-exempt municipal bonds would probably perform better under a Kerry administration, as the tax advantages of these securities would become more valuable.” Across different market sectors, Doll predicts a Bush victory could benefit the energy sector, with traditional energy companies in particular gaining an advantage from his preference for expanding production. Insurance companies may also perform better under a Republican government due to Bush’s plans for legal reform. Upscale retailers look set to benefit from Bush’s tax policies, which will stimulate spending in the high-income bracket. Generic drug producers would be likely to prosper through Kerry’s plans for pharmaceutical regulation, while mass-market retailers could gain an advantage through his tax policies, which are likely to benefit less wealthy Americans. Alternative energy companies would also be likely to do better under Kerry’s plans for increased environmental regulation. Doll is predicting a convincing Bush win. In the long run, he says, there tends to be little market difference between both administrations.