Here's why this strategist advises against mixing portfolios and politics.
Know that selling U.S. stocks to protest any winner of past presidential races, Democrat or Republican, over the past 15 years has meant losing out on skyrocketing returns during their first year in office, according to a new report from SunTrust Advisory Services.
And over the past 15 years, despite U.S. politics becoming increasingly acrimonious, the S&P 500 still outshined, with a 20%-plus return, during the first year of any president following an election.Looking back, anyone who fled stocks immediately prior to President Barack Obama moving into the White House would have missed the 26% total return for the S&P 500 in 2009.
“For example, under a Biden presidency, renewable energy, infrastructure and stocks impacted by trade policy could benefit; alternatively, under Trump, defense & aerospace, traditional energy and financials presumably could do better,” Lerner’s team wrote. But the “very low” taxes of the 2000s resulted in a negative-1% return for the index, mainly due to bursting technology and housing bubbles.
U.S. corporate defaults in the energy sector already have spiked since April as global oil prices tumbled, demand waned and prices mostly stayed below $50 a barrel.
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