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Newedge USA senior director Larry McDonald gives tips for having an election-ready portfolio.
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Between flash crash isn't trading years investors have a whole lot of things to worry about these days -- Cohen an unpredictable stock market.
That'll become even more unpredictable -- in the upcoming presidential election.
Many investors might want to keep their money under the proverbial mattress -- -- of -- does special guest he says.
There are ways to play the market regardless of who wins this fall best selling.
Author Larry McDonald now a senior strategist at -- yet at new edge joins Charlie now Charlie.
Thanks guys.
I just wanna set a couple of caveats -- -- really get into an Obama portfolio -- Romney portfolio and in a doomsday portfolio which will be the fiscal -- portfolio.
But when we're assuming a few things interest rates been -- policy remains instead place that we have for the next year.
We can't really take too many other variables -- -- because congress plays a role that which way -- so we're just gonna basically suggest that you know Republicans maintain that.
To maintain a house Democrats maintain the senate as it looks like it's gonna act as -- as -- look like what's gonna happen.
Okay in that scenario.
You could make money if Obama wins in the election.
Well there's a lot of risk points the biggest -- point -- because that's when the house was taken by the Republicans right 63 seats last time.
But the biggest score since 1938.
So there's a -- of aggressive.
Tea Party members right they provoked.
Promote.
The biggest threat to Obama of course of course but get to specific stocks what I mean the north that there are things there -- sectors you're gonna do well.
In -- that would with Obama -- economic agenda health care and you name it I think it's general because of the higher risk with a bomb when he that you defensive stocks.
So companies -- -- -- -- defense of food the food industry.
Alcohol industry so booze and food that the companies that do well during tough economic times people like to drink yet people still have to eat.
And we know the other thing that you talked about Larry was HMO insurance stocks.
Obviously because.
-- obamacare more people have to go I have to buy insurance.
And HMO's seem to benefit from that this yet this is the big risk for it because that hold these major industries like hospitals.
Right health care providers.
If Romney wins his wrists -- -- because he's gonna try to undo obamacare but if Obama wins it locks obamacare and they literally so metals that those abilities -- United Healthcare I -- you don't wanna give out.
Stock specific stock recommendations -- and I'm not make an.
Recommendation but those are some of the big names are there Aetna WellPoint kind of interest in -- -- if you if you think obamacare is going to adequately price Obama does get elect reelected.
And the deed the Democrats -- -- it it's it's done it's a done deal that's a thing as cements obamacare and these are greats and these and these are some of the sectors you wanna look at okay.
Now let's switch if Romney -- so this is kind of interest.
Pres Obama clearly won't even though the stock market has been up -- -- 100% since he took over right if it -- -- In in 2000 in March 2009 it's gone up from.
Roughly 6500.
To the Dow to 33 there whatever it is today it changes -- hundred points every day it's pretty big gain.
That said when I talk to investors and you know this is well.
They're more -- think Obama -- is a much more bullish president for the markets.
Why the one thing SE in my career in trading bonds and stocks.
Is visibility.
When that's cleared up.
I would give greater visibility at a sector if provides for nominal upside so the financials have had this massive cloud of uncertainty for almost eighteen point four months.
-- Romney win will.
Crystallize -- because TTE basically saying he's gonna get rid of best parts of dot Dodd-Frank -- -- -- reform parts -- -- so -- -- into financials.
Blue chip names Goldman Sachs JPMorgan I -- you don't wanna give -- -- those are -- those are those are some of the names that you should do pretty well.
If Dodd-Frank is what -- particularly Goldman Sachs because they're trading shop -- right.
And who knows what's gonna happen with the vocal -- so that's an interest in place using Romney's getting reelected Republicans keep the -- keep the house.
The Democrats keep the senate there's ways.
If you have -- if you have that if you have a certain sort of majority building via a watered down those those place what else do you like if and or in a Romney presidency.
Well.
Around -- if you look at obamacare there's stiff taxes on medical device makers -- which are very very damaging so the medical the -- from both Romney wins.
He'll try to.
Undo parts of obamacare and that's one area where Eli Lilly Medtronic does admit -- the taxes on those goal if he gets rid of the -- -- those companies will benefits -- -- stocks have to do pretty well because he's not gonna cut the defense budget is much is.
Is much is Obama's credit early that secrets the risk of sequestration we're gonna get into that receives we're gonna get -- had to say okay but so wouldn't we look at.
You look at the medical device -- you look at the financials.
You look at the defense stocks Raytheon Lockheed Martin now.
If we hit.
The fiscal cliff if and this is the scenario I did you would agree Obama wins -- president intends pick up.
Seats in the senate that's the -- -- still have a Republican majority in the house but you know -- on the pressure not to give in.
You -- have you really -- massive gridlock he hit -- fiscal cliff.
It was automatic spending cuts happen they kill defense did cause it's gonna be defense cuts mainly tax increases -- -- taxes go through the roof.
What do you -- -- -- hide your money or would you put your money and -- -- well this -- ways to play the market in terms of getting along volatility that's -- that's one of the -- right to -- which measures -- -- stock market combined if you know it's going -- you can make some -- treasury bonds I know the treasury yields -- super -- but that's a good place.
To set to save your money and also.
Again food.
An alcohol.
-- defensive sectors are those of the traditional sectors -- do well during -- now after we don't have this up on the screen but I'm gonna throw this out at you anyway.
Gun manufacturers if we -- this fiscal cliff do you think a Smith & Wesson something like that -- mean -- those still stocks.
Did pop early in Obama was presidency when.
You know lots of stimulus markets were imploding you know and -- did to him -- absolutely 2900 into the into the in March 2000 I doubt it.
Those those stocks got a pop you think that is a play here as well.
Well that that would be a real.
Devastating cliff scenario women from Bentley he said those -- well 2009 after -- so they're afraid to get that.
-- -- badly distressed but he -- -- thinking along those lines.
So if things really if you know what really hits the fan treasury bonds food blues -- Guns guns and -- -- -- think of the it would also that you get investors are they -- there right now our long things they own things right so here in high yield bonds get rid of those -- airlines related -- are all correlated -- -- sensitive.
You don't wanna be in with an Obama win if the if the senate picks up seats -- then you get into it and they had -- between a the Tea Party right in the senate you you get gridlock we get gridlock and that's we do with the fiscal cliff I don't wanna point out through to our viewers that.
-- really detailed explanation of all this is on foxbusiness.com.
You can read about it.
Wanna write me about it if you think I'm full bit about what these new Larry's -- with these portfolios let me know guys back.
