US election - winning trades Here is the obvious trade: Barack Obama wins - buy Treasuries, hedge with gold and sell stocks. Mitt Romney wins - sell bonds, buy dollars and stocks. Why obvious? First, the Federal Reserve. Mr Obama is seen as likely to keep to the status quo of accommodative policy, regardless of whether Ben Bernanke wants to stay when his term expires in 2014. That is positive for T-bonds. Conversely, monetary policy could turn more hawkish if a President Romney gets to name the next Fed chief. That is why an investor would want dollars, too, assuming that Mr Romney wisely and characteristically flip-flops, and decides against taking on China on day one. The consensus is also that a Romney victory would be better for stocks, and not just on the usual grounds that Republicans are pro-business. If Republicans keep control of the House, as pollsters predict, Mr Romney is seen as more likely to avoid the growth-killing $600bn in tax hikes and spending cuts entailed by the fiscal cliff. Why might the obvious be wrong? The race has been so tight that stocks might just rally to year-end in relief regardless of who wins. Deutsche Bank finds that to have been the case for close elections for the past 60 years. History also shows that the post-election year tends to be the worst of the four-year election cycle, which does not bode well for 2013, as the Stock Trader's Almanac points out. But it has been worse still if a Republican wins. Since 1953, post-election years under Republicans (two up and seven down) compare unfavourably with those under Democrats (five up and one down). The comeuppance arrives in year two when Democrat White Houses lag behind Republican ones. But all bets are off if the acrimony of the campaign was just a prelude to a tie or a contested result. A repeat of the 2000 fiasco would leave more than chads hanging.