2024 Election Impact on Investment Strategies and Market Sectors

Investors must focus on fundamentals, as market performance will thrive regardless of the 2024 election outcome.

### Navigating Investment Strategies Ahead of the 2024 Presidential Election
* 🗳 With the upcoming 2024 presidential election, voters are promised **low taxes, low regulations, and reduced energy costs** to make essentials **affordable for all**.
* 📈 Investors are preparing for market volatility as uncertainty surrounds the election outcome, noting that historically, the market has **thrived under both Republican and Democratic administrations**.
* 💼 Approximately **62% of U.S. adults** are invested in the stock market, and differing economic policies between candidates could **influence investment strategies**.
* 💡 A potential Trump victory may lead to **deregulation and favorable market conditions**, especially for small-cap stocks, while his focus on energy could paradoxically **pressure oil prices**.
* 🌱 Conversely, if Harris is elected, sectors like renewables may benefit from **continued support for the Inflation Reduction Act**, while corporate tax increases could impact the **financial sector**.
* 🏡 Both candidates express a desire to **support housing affordability**, which could benefit real estate investment trusts (REITs) due to their **resilience against higher corporate tax rates**.
* 🔍 Investors should remain focused on fundamental market drivers such as **earnings growth and inflation** rather than the election noise, as **time in the market** is deemed more crucial than **timing the market**.
* 💰 Overall, a balanced approach that includes **inflation-mitigating assets** and **value-oriented investments** may be advantageous regardless of the election outcome.

With your vote, we will deliver low taxes, low regulations, low energy costs, low interest rates, and low inflation so that everyone can afford groceries, a car, and a home. We've made historic investments in infrastructure, in chips manufacturing, and in clean energy. And as president of the United States, it will be my intention to build on the foundation of this progress. With about a month to go until the 2024 presidential election, investors are bracing for potential volatility in the markets as uncertainty looms over which candidate will win in November. It's really important that everyone remembers there is a lot of noise, there's a lot of volatility around elections. One way to think about the upcoming election is to look at a portfolio and consider, okay, what are possible sectors that could benefit the most. And the first thing that I would say is that under both administrations, over time, whether it's Republican or Democrat, the market has thrived. 62% of U.S.

adults are invested in the stock market. Differences in Republican and Democratic economic policies mean there are potentially nuanced ways for investors to position their portfolios to make money based on the outcome of the election. I think gaming the election and trying to make quick money on the election is a tough game, given the amount of uncertainty right now. This is not a binary outcome. It's not just about Trump and Harris; it's about control of Congress. That being said, there will be certain winners and losers coming out of this election cycle depending on what happens with corporate tax rates, what happens with regulation, and what happens with geopolitics. So which sectors and industries stand to benefit the most under each presidential candidate, and what can investors do now to best position their portfolios ahead of the 2024 election? I will end the devastating inflation crisis immediately, bring down interest rates, and lower the cost of energy. We will drill, baby drill. A victory for former President Trump in November will

likely mean favorable conditions for the market. Trump has made it pretty clear that he wants lower rates. He wants to be friendly to the market. He wants to be friendly to certain sectors. You'll see a rollback in regulation, and some of the existing regulation that's pending will get neutered or fall by the wayside. We'll have a less repressive regulatory environment, and you'll see companies more likely to engage in M&A without having that overhang of the regulators coming in and blocking transactions. The biggest beneficiary, which is deregulation, M&A, regional banks doing better. That's small-cap stocks. If you look at after Trump was elected in November 2016, small caps in those initial months really performed well. Doubled the performance of the S&P 500 during his administration. The performance was right in line to slightly below large caps, but we didn't have this really wide performance disparity that we're seeing now between the mega caps and everything else.

Trump's recent embrace of crypto could also translate to a boon for the industry. During his second term, Trump has done a 180 on crypto. I think for him, it's very transactional. He himself wouldn't care as much about it. But if you had someone running the SEC who was pro-crypto, that would be seen as a big boon for the crypto community because the kind of strong regulation by enforcement under Gensler would be gone. Some experts say Trump's friendliness towards the energy sector, however, could ultimately be negative for the sector's stocks. The reason it's negative for energy is somewhat counterintuitive, but President Trump is favorable for drilling, and he'd want to expand where we look for oil. But that would put downside pressure on oil prices. So even though that could be a positive in terms of operations for the energy companies, it doesn't necessarily mean they would do better because it really is going to be dependent on where the price of

oil is and what's going on really with China. Drill, baby drill is great for inflation, it's great for the consumer, but it's not necessarily good if you're selling oil. And oil's all about supply and demand. Meanwhile, Trump's rhetoric on tariffs, including his proposed 10% tariff on all imports into the United States and a 60% or higher tariff on Chinese imports, could hurt large-cap companies. While some investors say it provides opportunities for small caps and other emerging markets. Any kind of company which has got a large international revenue exposure, and they're typically those larger companies, they probably stand to lose the most because if there is any kind of very significant tariff, either against China, Europe, or any other country, those companies with international revenues, of course, are going to be more hurt than the companies which are more domestically focused. And certainly, that speaks to the small-cap companies maybe standing in a slightly stronger position than the large-cap companies.

Under the Trump administration, if there are greater actions against China, well, then companies in India are probably going to see a lot of interest. In the last two years, we've already seen that India has acted almost like a diversifier against China. If Harris is elected, an area that would tend to benefit would probably be some of the renewables, some of the green energy areas. The biggest thing about Harris being in power would be protection and continued implementation of the Inflation Reduction Act, which is a key legacy of the Biden administration. A lot of it hasn't been implemented yet, but this is big for wind and solar, biofuels, nuclear, hydrogen. One of the leaders in renewables would be NextEra Energy. That's a company that is in the utility sector, so will benefit from lower rates. But alternatively, some of the policies that could come out would actually probably be pro more green solar wind energy. So I think that's another area that investors should

be thinking about that could benefit from lower rates, but be a Harris administration because of favorable viewpoints toward those industries and sectors. Under a Harris administration, we would think that the international economy probably stands to benefit relative to a Trump administration from a market perspective. The market will start to realize fairly quickly that maybe Europe, China, parts of Latin America are not going to have as serious tariffs enforced on them. So you could see some positive movement for those markets. One of Vice President Harris's economic proposals is to push the corporate tax rate up to roughly 28%. That's important because, for example, the financial sector is going to have a harder time dealing with higher corporate tax rates because they have fewer ways to push some of those and defer those, whether it's depreciation or deductions relative to maybe industrials or energy. So I think that that's an area that people should be thinking about. Still, the success of Trump's and Harris's policy proposals will depend on which party has control of

Congress. To me, the most important consideration from an investor perspective is that Trump, if he wins, will probably have unified Republican control. And Harris, if she wins, will probably have divided government. So, you know, when Harris comes in, these tax policy ideas that she's laid out that would probably need to get done on a party-line basis. I think realistically probably are not going to be on the table. So, in a Harris presidency, I think the policy consequences for markets are more likely to revolve around, on the one hand, how do the bipartisan deals work out on the, you know, $4 trillion of taxes that are expiring next year? And on the other hand, how does she handle more routine regulatory issues? What does she do on antitrust, those kinds of things? And again, I think we will see a basically pragmatic approach from her. It's very difficult, I think, for investors to start to try positioning for either Trump or a Harris win.

What I think investors should be looking for is what are the bipartisan areas, what do we know is likely to happen under whichever government comes in? One area that I think really would benefit under both a Trump administration or a Harris administration is rights rights, and for real estate investment trusts. And what's so interesting about REITs is if you think about Donald Trump. One of the things that he has been very adamant about is that he wants to see lower interest rates. And more recently, even Harris has indicated that she would like to see lower rates for housing. So they all want to see lower rates that will benefit the real estate investment trust area because that area directly is competing with the bond market on yield for attractiveness. And if you do have higher tax rates under a Harris administration, that will not negatively impact REITs because they are able to not be affected by those corporate tax rates because their distributions are already taxed at ordinary income. So I think real estate is a real kind of crown jewel.

area that benefits from lower rates and is not impacted by higher corporate tax rates. If that came to pass. I think the key thing for investors heading into election season is to remember, you need to have some kind of inflation mitigation assets. A lot of the policies that are being discussed, either from a fiscal side, from a geopolitical side, and certainly from an international trade tariff side. They're all somewhat inflationary to different levels. So you want to have some kind of real asset exposure in your portfolios to protect against any inflationary pressures, not just in the very near term, but actually over a longer term as well. If you think. About other areas such as housing, home building, that's an area that both parties have said that, hey, we really want to support affordability, supply constraints. So I think that's another area that investors should be thinking about that will be supported. Meanwhile, both Big Tech and Big Pharma are two sectors likely to remain under scrutiny in Washington during

either administration. The scrutiny of Big Pharma and Big Tech is not a Republican or a Democrat issue. They're populist issues. People are concerned about the power of big tech and data privacy and issues like that. And so you're seeing scrutiny of them. On the other side of the equation, pharmaceuticals kind of get caught in the crosshairs, whether it's HMOs or whether it's big pharmaceutical drug companies. With regard to pricing, I think that the healthcare inflation really has been pretty substantial under both administrations. And if you look at an area where both parties do want to put pressure, I think it's around healthcare inflation. So I think that's an area that could be challenged under either a Harris or a Trump administration as they turn to focus on pricing for drugs, as well as reimbursements for the HMOs. And either of these candidates will be populist in some respect. If they're governing, then I think both those sectors are still going to be under a fair amount of

scrutiny. I think the overarching theme for any investor is to look away from the election noise, look away from watching every single poll, because it's a long time until that November result. When you look at the elections over time, regardless of who's been in office, the most important thing has been how are the companies underneath performing? What are the cash flows? What's the direction of management? Really, what fundamentally drives markets is going to be what's going on with earnings growth, what is going on with inflation, and what is the Fed going to do? And under almost all three of those elements, we will probably continue to do well under a Trump administration or a Harris administration. So the worst thing that you want to be doing is to be clocking out and going into cash just ahead of an election. One of our beliefs is that time in the market is more important than the timing of the market. So if you've been invested, you should be peeling back some of those gains, rebalancing some of those gains.

from the broader market and from the growth side of the equation. And looking at these value-oriented areas that offer those larger yields, because the value-oriented areas that have larger yields will benefit more from the lower rate environment. And I think that under both scenarios, you're going to see that.

How Investors Can Play The Stock Market Ahead Of The 2024 Election

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Impact of the 2024 Presidential Election on the Market

The upcoming election is causing market volatility as investors anticipate the potential winner.

Both Republican and Democratic administrations have historically seen market growth, but the election outcome could create winners and losers based on corporate tax rates and regulation changes.

A victory for Trump could lead to a favorable market environment, with deregulation and increased M&A activity benefiting small-cap stocks.

Trump's Impact on Crypto and Energy Sectors

Trump's shift towards a pro-crypto stance could benefit the industry, especially with a supportive SEC chair.

His favoring of oil drilling may put downward pressure on oil prices, potentially hurting energy sector stocks.

Trump's proposed tariffs on imports could negatively impact large-cap companies with international revenue exposure, while potentially benefiting small-cap companies and emerging markets.

The Impact of a Harris Administration on the Economy

A Harris administration is expected to benefit the international economy with fewer tariffs, potentially leading to positive market movements in Europe, China, and Latin America.

Her proposal to raise the corporate tax rate to 28% may pose challenges for the financial sector, while the success of her policies will depend on Congress's control.

Both Trump and Harris aim for lower interest rates, which could benefit real estate investment trusts (REITs) and make them a promising area for investors.

Investment Strategies Ahead of Election Season

Investors should seek inflation mitigation assets in their portfolios due to potentially inflationary policies from the upcoming election.

Home building and housing affordability are areas both political parties aim to support, making them attractive for investment.

Big Tech and Big Pharma are likely to face continued scrutiny and pressure from both parties, particularly regarding data privacy and healthcare inflation.

Investors should focus on company performance, cash flows, and management direction rather than getting distracted by election polls.

Earnings growth, inflation, and the Federal Reserve's actions are the key drivers of the market.

It's important to stay invested and rebalance gains, while also looking at value-oriented areas with larger yields, which will benefit from a lower rate environment.