He cautioned that long-run problems will begin in 2010 when thebaby boomer generation starts to retire and wants to cash in ontheir entitlements, particularly Social Security. "One problem withentitlement programs is that people feel they're entitled tothem."

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

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