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By John Nyaradi

Certain ETFs, like certain Presidential candidates, will be winners and losers after Tuesday's votes are counted.

potus flag, presidential stock market, uso, nysearca:uso, etfs for the presidential election, tan, nysearca:tan, nysearca:pzd, pzdAs the widely-watched Presidential election is now just days away, investors around the world are pondering the question of what will happen to the stock market and major U.S. ETFs if one candidate or the other is elected President. It's not unusual to observe - at a single website - several different commentaries presenting theories about the election's impact on stocks which contradict other opinion pieces at the same site. The typical discussion anticipates a walk down streets of gold if one candidate wins and the dystopian chaos the market will endure if the other guy is elected.

A study by Pedro Santa-Clara and Rossen Valkanov, finance professors at UCLA, revealed that between 1948 and 2007, the first year after the Presidential election manifests the worst job performance, while the second year sees the highest number of bear market bottoms and the third year is historically the best in the Presidential cycle.

Santa-Clara and Valkanov concluded that the new Administration, be it Republican or Democrat, does all the difficult, unpopular work during the first two years in office in an attempt to get all the unpleasantness behind it in time for the mid term elections.

In a recent interview on Wall Street Sector Selector, Eric Singer, the manager of the Congressional Effect Fund, and author of a new book entitled, Trade the Congressional Effect: How to Profit from Congress's Impact on the Stock Market, discussed the effect that Congress and the President can have on the stock market. Mr. Singer expressed the opinion that, ahead of the election, there are plenty of reasons to remain almost exclusively positioned in cash. In his opinion, ahead of the election, gold would also be a good investment because no matter who wins, there will be a sense that the dollar is going to go down further.

As investors, all we can do is develop a strategy that correlates to the agenda of whoever takes the Oath of Office in January. This is not a difficult task because each candidate's priorities are well known and so we can develop corresponding investment strategies designed to take advantage of the results of Tuesday's balloting.

Throughout the campaign, Mitt Romney has been an outspoken proponent of the oil industry - but not just any oil - Romney likes red, white and blue American oil. Mr. Romney has spoken at length about energy independence - longing for the day when America is no longer dependent on foreign oil. As a result, a logical ETF choice for a Romney administration would be the United States Oil Fund (USO). Of course, there are many other oil ETFs, but they aren't the United States Oil Fund.

united states oil fund, USO, NYSEARCA:USO

chart courtesy of StockCharts.com

In the chart of United States Oil Fund above, we can see that USO has been in a funk since early September and has fallen below both its 50 and 200 day moving averages, as the world worries about the slowing global economy and the potential decline in demand for oil. A Romney Presidency could likely trigger a value play in USO if he sticks with his campaign of furthering American energy independence.

President Obama has been criticized for his refusal to allow the carbon-based fuel industries to maintain their preeminent status as America's most widely-used sources of energy. Based on what the President has said about the future of alternative energy, a good bet for the second Obama term would be the PowerShares WilderHill Green Energy ETF (PBW). The PBW ETF invests in solar cell manufacturers as well as companies involved in the production of LED lighting. Some of PBW's holdings include First Solar (FSLR), Kaydon Corporation (KDN) and Fuel Systems Solutions (FSYS). Other possible alternative energy plays are PowerShares Clean Tech ETF (PZD) or Guggenheim Solar ETF (TAN).

Bottom line: As the campaign comes to a close with what appears to be a nail biter election, investors need to start looking to January and understand how the occupant of the White House could affect their portfolios. Regardless of political preference, it only makes sense to have a portfolio in sync with the winner's priorities and so be ready to "roll with the punch" instead of being on the mat for the next four years.

Disclosure: Wall Street Sector Selector actively trades a wide range of exchange traded funds and positions can change at any time.

Disclaimer: The content included herein is for educational and informational purposes only.

Source: 4 ETFs For The Presidential Election