A new year is upon us, and with it a new President and many, many new questions for the average investor to ask him or herself or their local MP or Congressman. There are many people out there, politicians not the least of them, that point to the present financial crisis and recession and cry “see THIS is proof that capitalism is the wrong way to go.” I say that's a silly thing to use as evidence.

Capitalism works – but only if you let it. This handout nonsense is essentially handcuffing capitalism from working - not saving it from itself. Capitalism is like Darwinism (layman here) – the strong survive. Popular opinion seems to like Darwinism – intelligent design be damned – but when the Financial Darwin bites your business in the ass because it sucks all of a sudden we don't believe anymore. Maybe you should have built a better car. (sorry, couldn't resist) Anyway, ideally policies make the business world slightly less ruthless than nature, as long as everyone knows the old teach/give a man to fish saying, right?

I grimace to think how much the general direction of capital markets and even the success of your average small business relies on policymakers in the coming year, and of course the magic-wand-waving ability of the President-Elect. He's a smart guy who hopefully listens to his advisors, who are smart guys too. The problem with a lot of smart politicians is they can tend to outsmart themselves, kind of like the laws that got passed with the best intentions about forcing banks to make loans they didn't want to back in the 90s... hindsight is 20/20. Not that I'm predicting the new administration will be terrible, just stranger things have happened. But anyway, looking (way)back, it wasn't FDR's New Deal that made the US what it became after the depression, it was The War. It wasn't just luck that gave the US such a great bull market post-dot-bomb and post-9-11: Bush's quiet policies actually allowed that. I'm not trying to get anyone to hate FDR and love Bush Jr, but most don't realize such things and should take them to heart when forming opinions about how to pull an economy out of the crapper.

There's a point here: as much as I might bitch and moan about the power that politicians might have over the economy in the coming year, just with random sentiment and silly things that'll push the markets in every which way, (“another day, another 300 points”) doesn't mean I'm not prepared to deal with it. A few considerations to always have in mind. Markets will move. The sun will still rise the day after. People need to eat. They need places to live. They need clothes. They even need cars – economical cars. They need such goods to be SHIPPED to them. They need energy. None of these factors changed last year except maybe the auto bit... but the auto industry's health I think was on borrowed time. Anyway, people even need BANKS. And yes, they even need fast food. And all of these kinds of equity prices will still manage to be affected by public sentiment or even intonations in a politician's words. That doesn't change their real value or balance sheet, as a whole. (in general) There is blood in the streets still... it's still time to buy.

A note on timing for retirement fundies especially(those who invest to build a retirement fund): long term investors are kind of at a handicap when it comes to timing. If anyone is retiring next year, I wouldn't make many investment decisions. Technicals are ok – but beware. For anyone retiring in 20 years or more, buying stock right now is even wiser than buying a house, although yes both markets are depressed. I'd even recommend going into debt to amass good positions in good stable companies that have been “unfairly” punished by the present mess. Basically, take a look at when you want to cash in your investments. If it's not for a long time, get on it. The closer you get to retirement, the tighter you should bring “stops” into play, so if you were planning on retiring in 2008 after investing for decades, your stops may have gotten you out before you watched your retirement lose half its value. See the idea? Oh, and about going into debt, I don't mean leveraging 100:1, just an amount that you can cover the payments on and pay off like you would your credit card (I hope)

Disclaimer:Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.