America Views The Economy In Shades Of Red And Blue
It seems that politics isn't the only thing that separates the red and blue states of this year's election, according to a new survey.

The Eaton Vance Corp. survey found that Bush and Kerry supporters also have divergent views about finances, investing and what it's going to take to improve job creation and the economy in general.

When asked about the importance of income taxes in choosing between a candidate, Bush supporters are six times as likely as Kerry supporters to say the issue was their top concern.

The Bush tax cuts, one of the most controversial topics during the election, was also a divisive issue among voters. Among Bush supporters, 79% believe the tax cuts have helped the economy, compared to the 48% of Kerry supporters who feel the cuts have hurt the economy.

Perhaps not surprisingly, supporters of the incumbent president were more optimistic about the stock market than were Kerry voters. The survey found that 55% of Bush supporters say they expect another historic bull run sometime within the next five years. By comparison, 41% of Kerry voters foresee a market boom so soon.

A majority of Kerry supporters, 51%, say they expect that a market collapse similar to the crash of 1929 will happen during their lifetime. Only 28% of Bush supporters felt the same way.

"The political skew we observed in market expectations was interesting," says Duncan W. Richardson, senior vice president and chief equity investment officer at Eaton Vance Management. "Adopting a radical view of stock market returns is hazardous to your wealth, since market timing is rarely productive."

The nationwide survey of 1,000 investors was conducted for the company by Penn, Schoen & Berland Associates in November, and has a margin of error of 3.1%. Half the respondents had investable assets above $250,000.
Among the other findings:
    Although they were divided on the benefit of Bush's tax cuts, both Bush and Kerry supporters share the view that future tax hikes would be     harmful to the economy. Bush supporters feel that way by a 3-to-1 margin and Kerry supporters by a 2-to-1 margin.
A majority of Bush voters, 79%, say they feel they have personally benefited from the tax cuts, compared to only 34% of Kerry supporters.
The privatization of Social Security is among the most divisive issues separating Bush and Kerry voters. Privatization has the support of 70% of    Bush voters, while 60% of Kerry voters are opposed to the idea.

Regulators OK Monte Carlo Tools
The NASD and the SEC have given registered reps the go-ahead to use Monte Carlo software tools for predicting the outcome of client investments. Registered investment advisors have used Monte Carlo simulations for much of the last decade to try to help clients understand the often random nature of equity market returns and the range of returns they can reasonably expect from portfolios.

The SEC approved a NASD-proposed amendment allowing the use of the tools this pat fall, which led to the NASD notifying its members that the rule change will go into effect February 14.

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