| Whenever I opine about how some new government policy or proposal is likely to affect the financial markets, I get a blizzard of emails from subscribers telling me that they "didn't pay good money" to hear me spout off about politics. This includes subscribers to our free e-letters, so they must feel strongly about it. However, I do feel a responsibility to let readers know which companies are likely to be positively affected by new laws and regulations - and which are likely to end up on the short end of the stick. It would be wrong to have insights into these matters and not share them with subscribers. My objective - always - is to influence readers' investment approach, not their political views. Yet it is hard to avoid stepping on toes. For example, I've long argued that much of the public funds spent to combat climate change are wasted. Yet I was surprised to recently learn how much money is wasted. An evaluation by the Berlin-based Mercator Research Institute of more than 1,500 climate policies in 41 countries found that only 63 actually worked to reduce greenhouse gas emissions. That's about 4% of them. Still, I've recommended several clean energy companies that have delivered great returns, due in part to generous but ill-advised government subsidies. The lesson: It pays to watch closely what is happening in Washington. You might wonder why, if I generally avoid talking about politics, I'm doing so now, especially in a close and contentious election year. The truth? It's vital that investors understand how politicians - and especially political campaigns - undermine the pursuit of your investment goals and negatively influence your view of the economy and the nation. Most voters - or at least most partisans - believe that politics is about principles... and platforms... and policies. And it is. But for the politicians, it's mainly about something else: winning. Politics is about gaining, holding, and wielding power. It's a battle of ideas. It's also a zero-sum game. In every election, someone is going to win. And someone is going to lose. The stakes are huge. Our lives, our economy, and our country are enormously affected by the policies that are debated, voted on, and signed into law in Washington. Politics is war. And, as we're told from an early age, everything is fair in love and war. For example, the presidential incumbent claims credit for everything positive that happened on his watch, no matter how tenuous the connection. (Yes, policies have consequences. But there is no lever in the Oval Office that controls inflation, interest rates, commodity prices - especially gasoline - economic growth, business developments, scientific innovation, geopolitics, the performance of the financial markets, and even the temperature of the Earth.) Incumbents - or their successors - will also claim that every negative development during their term was caused by circumstances beyond their control - or, better yet, by their opponents and their party - no matter how clear and direct the connection to the incumbent's own actions and policies. The next step is to define the opposition... in the most unflattering light possible. Deride their character. Undermine their experience. Highlight their past mistakes. Point out their flip-flops on the issues. Warn voters about their real or perceived shortcomings and their dangerous intentions. And be sure to insist that this is the most important election of our lifetime. Just like the one four years ago. And the one eight years ago. Some of the brickbats - especially the ones based on past votes and current proposals - are fair game and well deserved. But a lot of today's politics is nothing more than fearmongering about the dystopian future we will all face if the other guy (or gal) gets elected. This is where investors get scared and nervous and often flee volatile but high-returning stocks for the safety of lower-returning cash. They usually end up regretting it. And in my next column, I'll explain why. Good investing, Alex | 
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