He cautioned that long-run problems will begin in 2010 when the baby boomer generation starts to retire and wants to cash in on their entitlements, particularly Social Security. "One problem with entitlement programs is that people feel they're entitled to them."

According to Joseph Lisanti, editor, "The Outlook: S&P 500: Losses in the First Year of a New Presidency," the stock market generally performs better when a Democrat is in office. S&P chief investment strategist Sam Stovall noted that there is can be a bit of confusion in the marketplace when an incumbent is voted out of office, while managing director Phil Edwards said a second Bush term could look like the second Reagan term.

According to Stovall's "Possible Effects of a Bush/Kerry Victory," the S&P's economic department is forecasting that Bush has a 55% chance of being re-elected; however, the firm is advising investors to prepare for a possible Kerry presidency. S&P pointed out that with a Kerry presidency "consumers may moderate their shopping as they anticipate an increase in taxes." Also, Kerry's proposals to raise the capital gains tax rate could hurt commercial real estate values and REIT stocks. However, a Kerry victory might prove beneficial to healthcare REITs if Kerry proposes an increase in the Medicare/Medicaid reimbursement rates.