What the Election Might Mean for your Portfolio


Dear Fellow Investor,

The big day has finally arrived.

No matter who carries the day – Trump or Biden – one thing is clear: Volatility will reign. We here at Bottom Line Investor are of the opinion that “cash is a position, too” in moments like this.

That said, if you’re looking to get invested, here’s what you should do based upon the outcome you think most likely.

If President Trump retains the Whitehouse these stocks are looking like a good bet:

Trump Stocks

  1. Lockheed Martin Corporation (NYSE:LMT) – defense spending! Defense and aero companies tend to do well under Republican administrations. Lockheed has done well under Trump rising by about half since Election Day 2016.
  2. Bank of America (NYSE:BAC) – Again, banks traditionally do better under Republican control and that was true as demonstrated by Trump’s Tax Cuts and Jobs Act. Raising the corporate tax rate to 28% as Biden has suggested could shrink earnings per share by about 8% for the sector, and by more than 9% for Bank of America.
  3. The GEO Group, Inc (NYSE:GEO) is one of the largest publicly traded prison companies. Biden has vowed to end the use of private prisons, and Senator Warren has gone so far as to suggesting a limit to federal funding for those states that have private prisons. GEO offers a huge 16% dividend yield even after it cut its payout by 29% in October. If Trump wins, this stock could be poised to fly.

Polls skew more and more blue by the day, and with that investors might consider these three “Biden Stocks”.

Biden Stocks

4. Canopy Growth (NYSE:CGC) – According to fivethirtyeight.com the odds of Democrats taking the Senate this election are 76%. A Biden win, coupled with a Democratic Senate and an already controlled House is extremely bullish for marijuana stocks as the trifecta would likely move towards legalization.

5. Barrick Gold Corporation (NYSE:GOLD) – It’s safe to say that should the Democrats sweep, large fiscal stimulus is coming (think the New Deal Spending of the 1930s). Unfortunately, putting money in people’s hands and continued money printing from the Federal Reserve means a falling dollar and possibly inflation. This makes gold stocks like Barrick and the SPDR Gold Trust (GLD) solid bets.

6. Centene Corporation (NYSE:CNC) – Joe Biden was right there when the Obama Administration passed the ACA a.k.a. “Obamacare”. It’s a safe bet that should Biden win, the ACA will be cemented and expanded upon. This makes stocks like Centene, which specializes in government-sponsored healthcare solutions like Tri-Star and Medicaid, all-but-guaranteed winners as they are relied upon more and more to expand treatment for Americans.

 

Have a great weekend,

BLI Team

 

 

 

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