Gerald R. Ford R 1974-1977 (3 years 2 months completing Nixon's 2nd term) Dow 784.89 to 968.67= +23.4%, S&P 81.57 to 103.85 = +27.3%
Jimmy Carter D 1977-1981 (1 term) Dow 968.67 to 970.99 +0.23%, S&P 103.85 to 134.37 = +29.4%
Ronald Reagan R 1981-1989 (2 terms) Dow 970.99 to 2239.11= +130.6% (for all years) , S&P 134.37 to 286.91 = +113.5%
George H. W. Bush R 1989-1993 (1 term) Dow 2239.11 to 3255.99= +45.4%, S&P 286.91 to 435.13 = +51.6%
Bill Clinton D 1993-2001 (2 terms) Dow 3255.99 to 10,587.59= +225.17%, S&P 435.13 to 1342.54= +208.5%
George W. Bush R 2001-2009 (2 terms) Dow 10,587.59 to 8,281.22= (-21.8%) , S&P 1342.54 to 850.12 (-36.6%)
Barack Obama D 2009-2017 (2 terms) Dow 8281.22 to 19,732.40= +138.27% , S&P 850.12 to 2263.69 +166.2%
Donald Trump R 2017- present (as of October 23, 2020 market close) Dow 19.732.40 to 28,335.57= +43.9%, S&P 2263.69 to 3465.39 +53%
If your thoughts are markets will go UP, then look into TQQQ (ProShares (3x) NASDAQ-100 Index) should move up.
If your thoughts are markets will go DOWN, then look into SQQQ (ProShares (3x) NASDAQ-100 Index inverse) should move up.
There are some probable constants with either Presidential candidate winning.
Whoever wins the White House, 2 things will occur. There will be another stimulus package approved. The only question is the numbers finally agreed on. That will give the markets a boost.
If/when there is a vaccine (or more than one) to combat Covid-19, the markets will respond quite positively and beaten down companies will have strong gains.
The other fact that plays a significant part with whoever wins will be the makeup of the Congress. It is a longshot that the House will turn to Republican- but stranger things have happened in elections. The Senate, though, is another story entirely. 35 of the 100 Senate seats are up for re-election this year. Depending on whether Republicans retain the majority or Democrats win the majority will have strong impacts on the next president's programs. If political gridlock remains, investors could again feel that there is restraint on some radical proposals from both sides. If the President, Senate and House are all Democrats, that will certainly smooth passage of many programs. History shows that the volatility the S&P has had in election years reduces in non-election years.
Interest rates are extremely low. But if one were looking for interest income, consider dividends. As an example- AT&T (T) is paying 7.5% dividends yearly at the current stock price, and has been fairly consistent in the 5% -7.5% range based on the stock price for years. Of course as the stock price changes so does the dividend yield.
If Donald Trump wins, he will continue the programs already in place & we can expect the markets will continue to perform as they have. Yes, unemployment is high, but coming down. Virus infections have been spiking recently, but deaths have not- because younger, stronger people being infected are able to fight it off better than older people were in the beginning. And because of all that has been learned over the months of the virus.
The economy will continue to open up. Look to energy companies; refiners and midstream companies, to benefit. President Trump would most probably continue programs regarding energy. New taxes or regulations on fossil fuels are not a Trump goal, rather Trump would be friendly to fossil fuel production & possibly deregulate more.
Another Trump term will also mean tweets! Trump uses Twitter to get his message out. Even with Twitter censoring some tweets, it's still a hot topic with Trump. And the more tweets equals more eyes looking which translates to advertising revenues.
Also consider the opposite side- what to move away from or even short/buy put options. Green energy stocks that have gained going towards election predicting a Biden win, would lose favor.
Some specific stocks to research & consider under a Trump administration:
Banks stocks do just ok under a Trump administration, the only reason to hold bank stocks is for the dividend.
Bank of America (BAC, $24.90)
Citigroup (C $43.95)
JP Morgan (JPM $103.81.)
Goldman Sachs (GS $205.04.)
Defense & Aerospace companies:
3M Co. (MMM $169.80)
Boeing (BA $167.36)
General Dynamics (GD $140.70)
Honeywell (HON $175.54)
Lockheed Martin (LMT, $374.33)
Energy- currently a lot of oversupply for the foreseeable future from lockdowns/lack of travel from Covid-19. But combine a vaccine, businesses reopening, travel re-emerging & energy might be at a near bottom for the next move up
Chevron (CVX $72.57)
Exxon/Mobil (XOM $34.16)
Internet- many 'sweethearts' have done very well. For different reasons, these could continue, but be aware some may have hit top areas. And some haven't taken off as much.
This is a big area with many facets, so more stocks listed for differing reasons. Definitely do your research.
Alphabet Inc. (GOOG $1485)
Amazon (AMZN $3204.40)
Apple (AAPL $115.04)
Atlassian (TEAM $208.49)
Chegg (CHGG $86.76)
Chewy (CHWY $63.63)
CrowdStrike Holdings (CRWD $135.42)
DocuSign (DOCU $219.82)
Facebook (FB $284.79)
PayPal (PYPL $203.04)
Roku (ROKU $223.96)
Shopify (SHOP $1026.22)
Slack Technologies (WORK $28.76)
Take-Two Interactive Software (TTWO $164.43)
Twitter (TWTR $50.44)
Walmart (WMT $143.85) (listing WMT under internet as their online business is growing)
Zoom Video Communications (ZM $511.52)
Prison real estate firms-
CoreCivics (CXW $6.62)
GEO Group (GEO $9.00)
****NOTE! this is a 2-way street. If Trump wins these could be a long. If the Democrats win they have pledged to end the use of private prisons at the federal level. These would be short sale opportunities.
Travel- like energy, if a vaccine proves safe & successful, travel will reopen. Cruise lines & airlines have taken big hits from the virus, some have recovered a good amount. But with travel coming back there is a good deal more upside potential. And a Trump administration would not be on the warpath against fossil fuels.
Avis/Buget (CAR $40.38)
Carnival Cruise line (CCL $15.36)
Delta Airlines (DAL $34.00)
Norwegian Cruise line (NCLH $18.35)
Royal Caribbean (RCL $64.48)
Southwest Airlines (LUV $42.79)
Spirit Airlines (SAVE $18.58)
A Joe Biden win would be a different set of priorities, especially if Democrats are able to control the House and the Senate. A lot of changes proposed. A lot more to speculate on with a Biden win.
The concern is not that a Democrat President means a down market. The posted stats show it obviously does not. BUT there could be an initial 2-4% market drop off in the first 100 days as government interests rotate out of fossil fuels, banking, defense. Infrastructure, clean energy and health-care services companies would be poised to do well. Pharmaceutical companies and FAANG stocks (Facebook, Amazon, Apple, Netflix and Alphabet) could dip. A Biden administration would take a tougher stance on antitrust grounds, so techs that have done so well like Amazon, Facebook & Apple would be ones to consider moving away from, at least at the beginning of the administration.
Democrats want to expand social safety nets and infrastructure investments. Joe Biden has proposed some of the following
-a new universal child allowance to help parents and slash child poverty.
-a fully funded rental housing voucher program to ensure that every family that needs help gets it.
-expanding the Affordable Care Act to cover millions more and make coverage more generous for those who get it.
-a climate plan that centers investments in clean energy, rather than taxes on dirty energy.
-a huge increase in funding to low-income school districts.
-raise the federal minimum wage to $15 an hour.
All these have opportunities for investment dollars.
-Biden revealed (slipped?) at the last debate that he looks to "transition" out of the oil & coal industry. On September 6, 2020 Joe Biden told a young girl at a rally “look into my eyes, I guarantee you… we’re going to end fossil fuel.” He has at different times said he was ok with fracking and would end fracking. A Biden administration wants higher carbon controls, strict limits on coal mining, and reduced or eliminated fracking. So any investments in oil & gas could be headed for a drop. The rotation would move towards green technology- renewable energy/wind and solar projects. EV- electric vehicles will be a major area to be invested in for the coming years. Consider the market darling Tesla. Tesla is a solar energy company and power company, not just a car company. There will be many innovations in the automotive industry going forward. Tesla will be at the forefront. And there are other, smaller companies poised to grow in EV.
Biden would be strong on building alternative renewable energy substations and power plant facilities to support moving towards electric vehicles by consumers.
Other rotation areas would be steel production and other building materials putting people back to work upgrading roads/bridges/etc., healthcare expansion plans (including for the 'undocumented'), tele-health over the net, investments in 5G and artificial intelligence. This could be big for semiconductor manufacturers, electrical component suppliers, artificial intelligence applications and software developers.
-As mentioned earlier, Democrats are big for increasing the federal minimum wage to $15. per hour. If this happens retail, restaurants, hospitality and leisure could take a negative hit.
-Currently marijuana is legal for adults in 11 states. Arizona, New Jersey, South Dakota, Montana, and Mississippi have marijuana on the ballot in 2020. If these states pass legalization of cannabis on their ballots, 47 of 50 U.S. states will have some form of legalized marijuana. A Biden administration would look to decriminalize marijuana across the country. Therefore look into cannabis stocks. Also look for those in jails for possession to be released. Joe Biden’s criminal justice platform is quite negative towards prison companies’ bottom line. He has promised to revive an Obama-era policy of phasing out the use of private prisons to hold people convicted of federal crimes. Which means for-profit private prison companies bottom line and stock prices will hurt.
-Biden tax policy will be a factor. The proposed capital-gains tax hike could spur selling in technology stocks ahead of such changes. He has repeated numerous times he will raise corporate tax levels, which will hit the bottom lines of corporations. As an example, an increase to 25% would reduce earnings by 6%. But there could be an offset balance with a Biden Presidency. Relaxed trade tension/tariffs, which are estimated to have hit corporations to the tune of -7% off earnings last year. So a possible break even area. Deescalation of trade tension could benefit exporters that depend heavily on overseas revenue and domestic importers that have significant offshore production. There would also be increases on personal taxes on high-end earners and increased borrowing. This could effect reinvesting back into companies. It is all definitely a mixed bag.
Some specific stocks to research & consider under a Biden administration:
EV- electric vehicles. This has already been a hot area & will continue to increase with the Democrat 'war' on fossil fuels.
Arcimoto, Inc (FUV $6.20)
Nio, Limited (NIO $27.16.)
Tesla (TSLA $420.63)
Workhorse Group (WKHS $20.34)
Managed healthcare & Drug manufacturers- Democrats strongly believe every American has a right to quality, affordable health care. 'Medicare for all' will be talked about constantly.
(Also- no matter which person is president, the companies that come up with a proven, safe Corvid vaccines will score huge!)
Abbott Laboratories (ABT $107.79)
Cigma (CI $184.49.)
Centene (CNC $67.42)
CVS (CVS $60.42)
Humana (HUM $444.41)
Johnson & Johnson (JNJ $145.24)
Merck (MRK $79.83)
Moderna (MRNA $70.53)
Novartis (NVS $84.43)
Pfizer (PFE $38.18)
Teladoc Health (TDOC $216.32)
UnitedHealth (UNH $330.60)
Pot Stocks- Democrats definitely support soft drug legalization. Look at recreational & medical marijuana product companies.
Amyris Inc. (AMRS $3.05)
Aphria (APHA $4.55)
Aurora Cannabis (ACB $4.68)
Canopy Growth (CGC, $19.73)
Cronos Group (CRON $5.83)
ETFMG Alternative Harvest ETF (MJ $11.50)
GW Pharmaceuticals (GWPH $95.)
Tilray Inc. (TLRY $6.73)
Village Farms International Inc. (VFF $5.38)
Renewable Energy- wind, solar, hydroelectric and other green-energy idea.
ALPS Clean Energy ETF (ACES $58.14)
Brookfield Renewable Partners (BEP $53.18)
Invesco Solar ETF (TAN $71.12.)
iShares Global Clean Energy ETF (ICLN $20.22)
Iberdrola (IBDRY $50.85)
NextEra Energy (NEE $303.07.)
Vestas Wind Systems (VWDRY $56.40)
WilderHill Clean Energy Index (ECOTR $163.37.)
Bottom line, expect the winners would be different then the ones moving now, but the markets in general would move up after a shake out period.
There are also two things to keep in mind on personal investment/tax matters.
-First, no matter which person is the next President; do not panic sell! I can not say that strong enough. A perfect example is the hard drop after Tuesday September 11, 2001. Markets stayed closed until the following Monday September 17, 2001. When the markets opened, so many sold on the drops & lost vast amounts. But, by November 7, 2001 the Dow returned to before 9/11 numbers. The S&P was faster; it took one month to the day, October 11, 2001, to be back to the before 9/11 number.
Another example is the 2020 major drops from Covid. The numbers speak for themselves.
DOW February 12 high was 29551.42. It then dropped hard to 18591.93 on March 3, 2020 (-37.09%). As of this writing on October 23, 2002, Dow is at 28,335.57, -1215.85 (-4.1%) from the February 12 high.
S&P February 19, 2020 high at that time was 3,393.52. S&P dropped to a low of 2237.4 (-33.92%) on March 23, 2020. S&P closed October 23, 2020 at 3465.39 +71.87 pts gain/ +2.1% over pre crash high and
+55% up from the crash low.
NAS February 19, 2020 closed at 9817.18. It then dropped to a low of 6686.67 (-31.89%) on March 23, 2020. Nas closed October 23, 2020 at 11548.28 +1731.69 pts gain/ +17.6% over pre crash high. A +72.7% increase from the crash low.
Second to consider is if you withdraw money from 401k/IRAs. These are tax deferred accounts that you will pay taxes on for the year you withdraw funds. Joe Biden has said numerous times he will eliminate the Trump tax cuts. That, in effect, is a tax increase for everyone, no matter what rhetoric we hear. In this case withdrawing those monies on the last few days of 2020 will in effect cost you less in taxes then withdrawing anytime in 2021. So depending on who wins the election, plan ahead.
Also if Biden wins it would be beneficial to take capital gains in 2020 before the end of the year at lower tax rates.
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