Checking In with the Investor Class

We went back to a group of voters BusinessWeek profiled four years ago to see which Presidential candidates are speaking to their concerns

by Jane Sasseen

Ewing: Clinton has programs "to help people like myself"

With the U.S. economy souring and stock markets down, where are voters in the so-called investor class turning?

American voters who identify themselves as investors—those who own stocks and bonds directly or invest in them through 401(k)s, mutual funds, or other accounts—have been a key bloc in recent elections. Their backing was critical to both of President George W. Bush's victories, and their shift away from the Republican Party in 2006 helped put Congress back in Democratic hands. The same holds true now, says Daniel Clifton, a Washington policy analyst with Strategas Research Partners. "Whichever way they move in the general election, that will sway the vote."

Today the investor class accounts for roughly a third of the electorate. It's a diverse lot, including everyone from union members and suburban environmentalists to a growing number of African Americans and Hispanics. Still, within each group, investor-class voters lean toward Republicans, says independent pollster John Zogby. Union members who own shares back GOP candidates more often than their peers who don't, for example.

Candidates from both parties, of course, are trying to draw investors in. They're a key reason John McCain and most of his former Republican rivals pledged to maintain the Bush tax cuts—and an equally important reason Hillary Clinton and Barack Obama say they'll limit increases in capital-gains taxes to top earners.

To see how well each candidate is doing with investors, BusinessWeek went back to a group of investor-class voters we profiled in September, 2004, just before the last Presidential election. By and large they have done well, as have many American investors, but the economy's current woes present new hurdles.

MARRIED, WITH BABIES

Witness Peter S. Blasi, a 33-year-old lawyer living outside St. Louis with his wife, Tami, and three young kids: 4-year-old Marie, 21-month-old Andrew, and Maggie, who arrived in September. Blasi represents one of the biggest segments of investor-class voters: married parents with children at home. For many of these typical suburb-dwellers, the scramble to build up savings while the cost of housing, health care, and other expenses keeps rising is among their biggest financial challenges. Even as Blasi continued to max out contributions to his 401(k) and opened college savings accounts for his kids, he paid $439,000 for a bigger house last August. But in the troubled housing market, he has been unable to sell his old home. So far he hasn't lost money. Having paid $190,000 for it in 2002, he's notched his asking price down, from $230,000 to $224,900. Yet the strain of keeping up $3,000 in total monthly mortgage payments is starting to show. "It's sustainable—for now," he says. "But I'd like to get the money out and put it into something else."

Soaring health-care costs are also a big issue for Blasi, a Bush supporter in 2004. The premiums paid by his 15-person law firm have more than doubled in six years. Last year they jumped $25,000. But he worries about the tax hikes the Democrats could propose to pay for any expansive new health programs. "I'm more receptive to private market reforms as a solution rather than a mandated program forced by the government. But I do think there will be a role for both," says Blasi, who considers himself a fiscally conservative independent. While he has backed candidates of both parties before, that fiscal conservatism is a crucial reason he's for McCain this year. He's also impressed with McCain's ability to work with both sides on stalemated problems like immigration. "I think he's more open to finding nontraditional avenues than most Republicans," says Blasi. "We're entering a phase where that kind of flexibility is needed."

TUITION WORRIES

Blasi's situation is similar to that of Duane Ewing, a software-marketing manager who lives in Katy, Tex., a Houston suburb popular with oil and gas executives. Investor-class African American voters, like their white and Hispanic counterparts, are more likely to go with the GOP than their noninvestor peers.