In what might be considered a surprise to some, three quarters of hedge fund donations to presidential candidates have gone to Democrats, with Barack Obama and Hillary Clinton leading the way, according to Institutional Investor. Typically, wealthy people tend to favor the Republican party thanks to the party's pro-business ideals and favorable tax policies. It appears that in this election, though, the wealthy hedge fund industry is looking for change more than tax savings.
The leading candidate for hedge fund donations is Hillary Clinton, who has accumulated $802,000 thus far, according to Institutional Investor. Obama sits at around $720,000. In stark contrast, presumptive Republican nominee John McCain has received only $267,000. With McCain promising to keep Bush’s tax cuts alive, potentially saving the wealthy lots of money, and both Democrats promising to at minimum let the tax cuts expire, this came as quite a shock to me. It is apparent that the wealthy are looking for something else this year beyond dollars and cents.
It is always interesting to me to watch where the “smart money” is investing; typically they are much savvier than your average Joe. I don’t always agree with their investment decisions, and they certainly are not always right, but I do find that they are often pretty good at identifying opportunities. Who knows, maybe there is something to be said for their preference in presidential candidates as well; I’ve never thought to look into it before.
At this point I’m not leaning toward any of the candidates. Usually I go Republican, but at the same time, I worry that McCain will just be another Bush and in the end nothing will get done. On the other hand, I’m not a big fan of the Democratic candidates with their big spending proposals, desire for increased government involvement and promises of more taxes. Right now I’m still undecided, hoping that one of the candidates impresses me before voting day.
I don't know if hedge funds are looking more for change rather than tax cuts. They may just be showing that they have a higher expectation that there will be a Democrat in the White House in 2009 and they're putting their money where they can leverage it.
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