Financial advisors disappointed by President Obama's victory may find some relief in the fact that markets historically do better under Democratic presidents, according to two experts in the financial field.

The belief that Republican presidents always bring good market conditions is not born out by history, said Robert C. Pozen, senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution.He also served as chairman of MFS Investment Management and president of FMR Corp., the advisor to Fidelity's mutual funds.

Pozen and James T. Swanson, chief investment strategist and fixed-income portfolio manager at MFS, discussed the impact of the election on the economy yesterday in a webinar hosted by MFS.

The speakers noted that most of the major players in federal government remain the same, with the "fiscal cliff"--the impending expiration of the Bush tax cuts absent action by Congress--is now the biggest unknown regarding the economy. 

"Markets move in response to growth in the economy, not because of taxation or elections," Swanson said. Despite that, he added, "it is going to be in the best interests of both parties to reach a compromise to avoid the fiscal cliff."

A compromise is likely since it will not be in either party's interests to spark a recession just as the economy is starting to grow, he said.

President Obama's re-election will have an affect on some issues, Swanson said. The defense industry will not do as well as it would have under Mitt Romney, who promised to increase defense spending, and the health care industry will face a mixed bag of influences, he said.

"Repealing Obamacare is not in the cards," said Pozen, adding that small parts of the legislation may still be tweaked. Likewise, a voucher system for Medicare, as proposed by Romney, will not happen, but increasing the tax for Medicare could be on the table, especially as it applies to capital gains, he said.

In the area of financial regulation, Dodd-Frank will remain intact, Pozen said. "Some parts may be pared back a little, but not by much, and there will be no repeal," he said.

Financial advisors with clients nearing retirement should tell them not to over invest in bonds and not to chase the highest yielding equities, either, Swanson advised.

Companies have been sitting on cash for a while and that is not going to change in the near future just because the election is out of the way, so there will be no big hiring movement, he added.

"Some cash will come back into the system as the fiscal cliff is resolved, but not because of changes in taxation, but because the uncertainty will be resolved," Swanson said.

The makeup of the Supreme Court could change, and if it tilts to the left, the Citizens United decision, which removed caps on corporate political contributions, may be re-examined, Pozen predicted.

--Karen DeMasters