I have gotten tons of questions from you guys about the stock market and the 2020 election. I have had multiple people ask me, if they should pull their money from the markets. The answer? Definitely not. I personally think that you should pull money from the markets, if you do not own 1-10% of your portfolio in bitcoin. If you want to purchase bitcoin, you can use this link. We both get $10, if you purchase more than a $100 worth. However, the stock market will be fine regardless of the outcome of the election for the rest of 2020. Charles Schwab found that since 1928, the S&P 500 Index has ended on a positive note 74% of the time (17 out of the past 23 presidential election years) with an average annual return of 7.1%.
Remember, if you buy great companies than it does not matter who is President. From corporate profits, to trade and globalization, to investor sentiment, Wall Street has many factors to watch aside from who the president is and whether the House and Senate go red or blue.
My biggest concern is that I personally do not believe that we will know who will be our President on November 3rd, 2020. What does this mean? It means that the markets will become unstable with high volatility. If you want to make a quick profit on the volatility, I would suggest playing “VXX” this is a stock that follows the VIX. What is the VIX? The VIX is an indicator that tells you how stable or un-stable the stock market is on any given day. For example, prior to covid-19 hit the VIX was around 15. When the markets crashed in March, the VIX went all the way up to 85. The VIX sits around 37 as of November 2nd, 2020. Please keep in mind that if we know a President on Election night, I do not see us having high volatility in the market. However, I do think this could be one of the wildest weeks in American History.
President Donald Trump Win
What does a President Donald Trump win mean for the stock market? We know that our taxes and the corporate tax rate will stay at the same rate as they are now.
The sectors that will do well under a Trump Administration:
Sectors that have generally been favored under Trump include oil/gas/coal/nuclear, military, financials, technology, and some industrials.
The Clean Energy Sector and Chinese stocks will not respond well to a Trump win. With that being said, please keep in mind that Trump’s trade China war has been very bad for the Agriculture sector.
The market did not respond well to Trump’s China Trade war, and their is universal belief that he will keep the China Trade War as one of his first priorities.
Vice President Joe Biden Win
If Vice President Biden wins, the main sector that you should focus on is the clean-energy sector like Tesla. Clean Energy is a massive opportunity for some investors in the next ten years, and Biden plans on doing big things with this sector if he wins. Chinese stocks will also fare well due to the relief that the Chinese Trade war is likely to come to an end. A Democratic White House does great things for Firearm stocks. President Obama was the best thing for gun-stocks. People feared that they would ban the sale of firearms, so they went out and bought them. The Cannibas ’ ’ industry is the final sector that I will be focusing on if Vice President Biden wins. I personally believe that weed stocks still have a long way to go, but Joe Biden would give them the biggest hope that they have seen in years.
We could see backlash in the market, if Vice President Biden goes after the corporate tax rate. However, Vice President Biden has always leaned favorably to being a pro-wall street guy.
It will be interesting to see what happens. Always remember to buy great companies like Apple. Iphones will still be bought and sold regardless of who is President.
President Donald J. Trump winning means Iran has officially gone on watch. Look for instability in the middle east due to this. Defense stocks could be a big play as tensions with them get worse and worse.
Stay Hungry, Stay Foolish,