Elections and Our Portfolio


The biggest question investors have right now is what will happen to my portfolio when either party takes office. Looking back at the start of Trump's first presidential term, we see that markets had a massive rally that was only cut short due to the Coronavirus. Many investors around the world believe that markets thrive under republican candidates, but that may not be the case when looking at the facts. Trump's campaign was a one off due to his involvement with big business and his timing after President Obama's efforts to guide the country out of the 2008 recession. Not to discount President Trump's impact, but he took office at a peak momentum in which our big tech companies were beginning to thrive and grow our overall economy with advancement in technology. Historically, when comparing republican vs. democrat terms, we see that there's very little change in average S&P return under either party. 

What can we expect?

While the S&P average returns remain the same, there are still a few sectors and industries that are expected to thrive under another Trump term and a few others under a Biden term. 

Trump and Defense 

President Trump has allocated billions of dollars to build United States' defense so we can expect defense stocks to react positively to a Trump win. Considering Trump's republican term, we can also expect any stocks involved with weapon production to also thrive. 

Trump and Banks

Many investors and analysts expect banks to perform well under Trump due to his cut in corporate taxes, but from a subjective standpoint, we don't agree. As a long term investment, banks are becoming less appealing as the old brick and mortar structure is beginning to fade away and advancement in financial tech is on the rise. This doesn't necessarily mean bank stocks will die out (that will take decades to happen), but we won't be including any bank stocks in our long term plans. 

Trump and Tech

With a promise of lower corporate taxes, tech giants like the FANG stocks are expected to thrive under another Trump term. 

Trump and US focused Companies

Since he first took office, Trump vowed to focus on agricultural, heavy equipment, and American vehicle companies. He has endorsed the farmers of America endless times therefore any stocks related to that sectors are expected to react positively to a Trump driven win.  

The Other Side

Introduction: Considering the false speculation that a democratic president is bad for the market, we can anticipate the markets to experience a sell off if Biden is to win. This will naturally happen as a speculative reaction, but we believe that the market will recover as the American economy makes a comeback overtime. Large caps and big tech could suffer the most during this sell off due to the expectations of increased corporate taxes, but their endless growth will still prove that they are still long term winners in any disruptive innovation driven portfolio. 

Biden and Renewable Energy 

Biden has vowed over and over again to decrease the use of fossil fuels and shift focus in our world to renewable energy; therefore stocks involved with green energy are expected to react positively to a Biden term. 

Biden and Healthcare

Piggybacking off of Obama's big healthcare focus, Biden is promising a big focus on heath care reform in the United States.

Biden and Cannabis

With the promise of decriminalizing marijuana and changing the laws around it, Cannabis stocks have already been reacting positively to the potential of a Biden/Kamala presidency. One of the main ETFs to focus on is MJ, which holds multiple large marijuana companies on the market.

Summary and other things to consider

In summary, our speculative outlook on the long term future of the market is bullish. With advancements in technology and their position in the overall market, we believe that they will continue to grow their market caps and post positive earnings leading to higher gains. The short term future of the market remains uncertain due to the impact of Coronavirus on the worldwide economy and any reaction in the market may be Covid induced, not necessarily presidential party induced. Our approach in our long term plans remains aggressive in innovative technology, regardless of who takes office.