By Rick Glaze

The election is over and soon we can start watching for a good, healthful dose of gridlock. This happens when competing sides in Washington are close in numbers and little can be agreed upon. Many Wall Street pundits think gridlock is good for the markets because the status quo is maintained and no surprises in economic policy are expected. Steady policy is good for investors and allows companies to plan for the future.

Meanwhile, the evil spirits that frequently haunt the stock market in October failed to materialize. The often-volatile month showed solid gains this year. Solid earnings growth fueled these gains. In fact, consensus forecasts for the large company index, S&P 500, is for earnings to grow 15 percent in the quarter just ended. The employment situation is positive, with unemployment at around 4.5 percent. Historically this is a very low rate, which in the past has brought risks of inflation as salaries often rise as companies compete for employees.

On another note, recent momentum in alternative energy has caused the cost of producing electricity from solar sources to fall precipitously. The cost of producing a single watt of electricity from solar reportedly has fallen from around $30 in 1980 to an average of $3 to $4 today. Local companies are spending research and development dollars to bring that even lower. That, along with other refinements in alternative energy, would be a promising long-term development.

Rick Glaze is president of Glaze Capital Management Inc. of Los Altos and a general securities principal offering securities through First Allied Securities Inc. For more information, e-mail Rick@Glazecapital.com.