The hotly contested midterm elections are over, and the results were largely in line with expectations. Republicans, particularly Tea Party-backed candidates, won control of the House of Representatives and secured strong gains in the Senate.

Back to reality. Despite the campaign rhetoric, the health care and financial reforms enacted by the Obama administration are likely here to stay. These efforts were the cornerstone of President Obama’s 2008 campaign and he would almost certainly veto any changes to the law. Though Republicans picked up 60 House seats and six Senate seats, they still lack to the two-thirds majority required in both chambers of Congress to override a presidential veto.

Nonetheless, the Republicans did gain a major advantage. Controlling 56 percent of the House enables Republicans to direct the legislative agenda. Their gains in the Senate mean that the Democrats no longer have the 60-seat supermajority needed to carry a cloture vote that ends debate in favor of a quick floor vote on legislation.

The election of Marco Rubio in Florida’s 17th Congressional District was another major coup for Republicans. It may not be politically correct to view candidates through a racial or ethnic lens, but a Tea-Partying Hispanic who also happens to be the son of Cuban exiles will help in rebranding the Republican Party as a pro-legal immigration party rather than an anti-illegal immigration party. It’s a subtle distinction, but an important one that could put the Hispanic vote in play for the Republicans. This should be an interesting 2012 election cycle.

The majority of the electorate got exactly what it wanted in this election. Our political system is based on a system of checks and balances that functions best when different parties control the executive and legislative branches. This pattern has played out in almost every midterm election since the Reagan years. Substantial midterm losses for the majority party almost always result in more measured legislation that doesn’t lead to radical new regulation.

This year’s midterm election results should boost investor sentiment. The stock market loves gridlock. Although the financial and health care reform laws are likely to be a fact of life for at least the next two years, don’t expect more game changing regulation to come down the pike. Many of the tax cuts introduced by George W. Bush will likely be extended. Clarity on this issue, coupled with tax relief for multinationals repatriating cash, should push the broad market higher. Commodities prices should also rise after another round of quantitative easing. All of these developments set the stage for a bullish fourth quarter.

The energy sector will likely perform well in this political environment. The 112th US Congress will probably take another swipe at cobbling together an energy bill that favors natural gas interests and encourages the development of nuclear energy.

Although the results of this election will likely fuel more gridlock in Washington, partisan politics always create investment opportunities.