1 ETF and 1 Cryptocurrency to Buy if Donald Trump Wins the Presidential Election, and 2 Stocks to Buy if Kamala Harris Wins

Voters will soon head to the polls to elect the next President of the United States in what could be the closest presidential election in history. The next President and Congress will implement new regulatory regimes and laws that could impact the stock market and several other sectors. I think most investors have been positioning their portfolios to not only benefit from the candidate they think will win, but also to hedge the victory of another candidate. Here’s one exchange-traded fund (ETF) and one cryptocurrency to buy if former President Donald Trump wins on election night, and two stocks to buy if Kamala Harris wins.

If Trump wins…

If Trump wins, let’s look at bank stocks. Although banking regulation is not the focus of this election, President Joe Biden’s administration has been very punitive toward the banking sector. Several unchecked bank operations, some of them in 2023, are likely to result in bank failures at the fastest rate ever. Many believe some banking regulators have been slow to act, which may have increased the sense of urgency over the past year.

But even before that, the current administration’s regulators significantly slowed the approval time for bank mergers and acquisitions, causing some large banks to cancel mergers and acquisitions and leaving others wondering whether it was worth pursuing them. Smaller transactions between banks and fintech companies also struggled to get approval in a timely manner, leading to a number of mergers being canceled. Bank M&A is a catalyst for the sector, so the floodgates could open if President Trump is elected.

Moreover, President Trump has deregulated the banking sector before, so there is good reason to believe that he will not make major changes to banking regulations again. One way to get exposure to banks is to buy into them. SPDR S&P Regional Banks ETF (break down 2.87%). The chart below shows what happened to ETFs after Trump was elected in 2016.

KRE data from YCharts

Another sector I will look at is cryptocurrency. To be more specific: bitcoin (BTC 3.74%). Bitcoin has rebounded in recent months partly on the prospects of a Trump victory. The Trump administration is likely to be more supportive of cryptocurrency regulation. President Trump previously discussed the idea of ​​firing Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC). Cryptocurrency holders do not see Gensler as a friend. Gensler has repeatedly suggested that most cryptocurrencies should be regulated by the SEC, which would lead to stricter measures for digital assets.

Trump may also advocate for policies that address the gray areas of cryptocurrency. Trump has expressed support for Bitcoin miners and could also make it easier for banks to hold some digital assets or do more with the blockchain network.

If Harris wins…

If Harris wins, she will look at homebuilding stocks and electric vehicles, sectors the vice president has expressed support for. On the campaign trail, Harris has pushed for policies to help solve America’s housing crisis, including building more homes and providing financial assistance to first-time homebuyers.

Harris specifically proposed creating 3 million new homes through tax breaks for home builders that prioritize homes suitable for first-time homebuyers, while also providing incentives for businesses to build rental homes. Harris also proposed providing up to $40 billion to encourage local governments to eliminate zoning that restricts new homes above a certain supply, and discussed providing $25,000 in down payment assistance to first-time homebuyers. . I’m not sure what policies both Democrats and Republicans will be behind these days, but I can see the housing market gaining traction. After all, high home prices and rents have been a big driver of inflation, and that doesn’t help anyone.

One of the stocks that can ride momentum is DR Horton (DHI 0.64%)It has been the nation’s largest homebuilder by volume since 2002. DR Horton also builds homes specifically for the affordable and aimed at first-time homebuyers, so it would be in a position to expand this focus if it were more profitable for the company.

Harris is also seen as a more favorable candidate for electric vehicles and is expected to continue Biden’s advocacy for the industry. Biden’s inflation reduction law granted a $7,500 tax credit to people who bought electric vehicles manufactured in North America. Trump has proposed ending these tax deductions. Some believe Harris will continue to invest in electric vehicle charging infrastructure. If Harris is elected, expect to see a California-based electric vehicle manufacturer emerge. rivian (RIVN 3.92%) To make a profit.