To some investors, Obama means risk

And what are investors in general supposed to think, and do, about their portfolios with Obama coming to power?

The battered stock market kicked off this week looking hopeful. On Tuesday, as Obama seemed all but assured of winning the White House, the Standard & Poor's 500 index jumped 4.1%.

That was followed on Wednesday and Thursday by the worst two-day decline of this year-old bear market, slashing 10% off the S&P.

Welcome, Mr. President-elect!

On Friday, after Obama's first post-election news conference, the S&P finished the day with a gain of 2.9%.

But did stocks' swings this week have anything at all to do with Obama? Racked by the credit crisis and the growing likelihood of a deep recession, financial markets have been given to extremes for the last two months, mostly to the downside. The presidential race added to the uncertainty, but it never was the main driver of this market turmoil.

Obama's supporters believe he has the solutions needed to get the economy growing again. Stabilize the financial system and fix the economy, and the stock market should respond positively -- right?

But plenty of people believe Obama's ideas will be somewhere between hurtful and ruinous for investors over time.

Tom Kerr, who helps manage $2.5 billion in stocks for Reed, Conner & Birdwell Inc. in L.A., asserts that many of the policies Obama has espoused are "job destroyers and are bad for all size businesses in America."

He ticks off his list: "Less free trade . . . more business regulation . . . increased union power . . . higher tax rates on big consumer spenders."

Kerr also notes that Obama has proposed a windfall-profits tax on oil companies. Kerr suspects Obama would start with Big Oil, then move to boost taxes on other industries -- say, the big drug companies.

Obama's image with investors such as Kerr wasn't helped by the Illinois senator's comments, in the famous exchange with Joe the Plumber, about wanting to "spread the wealth around."

"Socialist!" the Republicans screamed. In America, that word is a guaranteed spine-chiller for the richest of the investor class, and even for the not so richest.

Any of the well-heeled who need an excuse to sell stocks now, even with the S&P 500 down 40% from its 2007 peak, can cite another Obama promise: his plan to hike the maximum tax on long-term capital gains and dividends to 20% from 15% for couples earning more than $250,000 a year.