Positioning your portfolio so it's election-ready

As the 2024 presidential election is just under three months away, Kace Capital Advisors managing partner Kenny Polcari joins Morning Brief to discuss how a Harris or second Trump administration could impact the economy and how investors can best position their portfolios ahead of November.

"We kind of know where Trump stands in terms of the economy and policies that he'd like to implement. We still have not heard from the other side. We have not heard from Kamala Harris's campaign on what her policies are. She's out there waving to everybody, saying I'm going to change things and I'm going to do this and I'm going to do that, but there's no policy. You go to her website, there's no policy," Polcari explains.

He notes that a lack of clear policies is causing uncertainty in markets (^DJI, ^IXIC, ^GSPC). If Harris were to establish a platform, investors would be able to properly assess their positions and better understand how the economy may respond to her administration.

Polcari encourages investors to take a defensive approach to their portfolios, investing in areas like consumer staples and utilities. As the tech sector experienced intense volatility last week, Polcari sees a dip in a name like Nvidia (NVDA) as a "screaming buy."

"It's down 30% in Nvidia when the story hasn't changed, was a real opportunity for the long-term investor that's looking out 5, 10, 15, years." Polcari adds that August to October is historically a weak time for markets, and as the markets go lower, investors should either get more defensive with their portfolios or invest in US Treasuries (^TYX, ^TNX, ^FVX).

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

In the notes that you sent over to us.

You had a quote saying the Biden Harris years have been a disaster for the economy.

Talk to me about where you stand in your thinking on which what, what either candidate's potential in the White House come November could mean for the economic path here moving forward.

Well, you know, it's very interesting, you know, we kind of know where Trump stands in terms of the economy and policies that he'd like to implement.

We still have not heard from the other side.

We have not heard from Kamala Harris's uh uh campaign on what her policies are.

She's out there waving everybody saying, you know, I'm gonna change things and I'm gonna do this and I'm gonna do that, but there's no policy.

You go to her website, there's no policy.

So we still don't know what Kamala Harris and the, and, and that ticket is really planning in terms of policies.

We do have a sense.

It's with Trump, we understand where he wants to go.

He's been very clear, we have a history with that.

We don't have one with Kamala Harris at all and she's not really putting one forth, at least not yet.

Uh And that's causing more uncertainty and uh and lack of clarity in the markets at some point, she's gonna have to stand up and say, look, this is the policy, this is the platform, maybe we're gonna get it this week at the Democratic National Convention, maybe.

Um And if we do, then it'll be clearer for investors to kind of assess.

OK.

Here's what he thinks, here's what she thinks and where and where to, where, where are we, right?

Where are we as investors in terms of where do we think it should go?

So, ok, what should investors then be doing when they're trying to position their portfolio?

There's a slew of uncertainty out there.

Should they be making any changes now and why or why not though?

I think as a long term investor, here's what you have to do.

You have to at this time, I think if you're gonna add more money to your portfolio, you have to add it defensively.

So you have to think of kind of big boring names, consumer staple names.

You gotta think of utilities which are the most boring sector in the whole group.

But at this time, especially if rates are gonna go lower, utilities will benefit, right?

Nee is a great name that's still down 12% from when they started uh raising rates two years ago.

So if they start cutting rates, Nee is gonna be one of those names that benefits from that and it already is an anticipation, right?

Consumer Stables are another kind of boring group yet.

They're good dividend payers and look, there's stuff that we need.

Proctor and Gamble, uh Kimberly Clark Johnson and Johnson.

Those are all things whether we're in a recession or not, that consumers are gonna need.

So you gotta get a little bit more defensive.

Now, if you see a big pullback in some significant names, whether they're tech or otherwise, you know, NVIDIA was off 30% on by Wednesday night.

Now it rallied a little bit on Thursday and Friday, but it was off 30%.

That was a screaming by, for me, whether or not you like tech or not, do you think, you know, you shouldn't be in tech because it's too nervous is down 30% in NVIDIA when the story hasn't changed was a real opportunity for the long term investor that's looking out 5, 1015 years, right?

Um And so that's how you have to position yourself.

But if you're, if you're nervous about what's gonna happen over the next uh two or three months, which is a seasonally weak time of year in the markets.

Anyway, August to October is seasonally weak, the market tends to go lower.

Then either you do two things you, you, you get more defensive with, with the boring names, consumer, save utilities or you put your money in treasuries, earning five percent or 4.5%.

That is also an investment decision, right?

That's certainly some activity that we're starting to see.

Kenny.

Thank you so much for joining us.

That was Kenny PCA case capital Advisors, managing partner.

Thanks so much.

Bye bye.