The Most Important Election of 2025: How the Outcome Could Shape Your Portfolio

As the 2025 U.S. presidential election approaches, investors are wondering how the outcome will impact their portfolios. While history demonstrates that markets can gain under any kind of presidency, individual sectors and industries may be impacted for better or worse. This guide explores how specific sectors may respond to either a Vice President Harris or former President Trump administration, focusing on four key policy areas: trade and tariffs, taxes, immigration, and Federal Trade Commission (FTC) changes.



Trade and Tariffs

Vice President Harris is expected to take a more lenient approach to trade and tariffs, potentially reducing tensions with trading partners and promoting free trade. This could lead to increased international trade, benefiting sectors like Technology, Consumer Discretionary, and Healthcare. In contrast, former President Trump implemented protectionist policies, including tariffs on imports, which could negatively impact companies that import goods for domestic consumption. This could affect sectors like Consumer Discretionary and Healthcare.

Taxes

Vice President Harris is expected to raise corporate tax rates, which could negatively impact companies' bottom lines and potentially reduce capital expenditures. This could affect sectors like Technology, which has a very attractive tax profile due to intellectual property ownership and geographically diversified revenue. Former President Trump implemented tax cuts, which could benefit companies and potentially boost investment. This could positively impact sectors like Consumer Discretionary, particularly those with heavy U.S. profit exposure, such as Restaurants, Lodging, Regional Gaming, and Hardlines/Broadlines/Grocery.

Immigration

Vice President Harris is expected to take a more lenient approach to immigration, which could lead to a larger workforce and potentially boost economic growth. This could benefit sectors like Consumer Discretionary, which relies heavily on labor. Former President Trump implemented stricter immigration policies, which could lead to labor shortages and potentially slow economic growth. This could negatively impact sectors like Consumer Discretionary.

Federal Trade Commission (FTC) Changes

The FTC and DOJ have taken a more active approach in the technology industry, particularly when it involves M&A, consumer data, and monopolistic behavior. This has led to a decline in M&A activity, with transaction value decreasing by 60% in 2023 compared to previous years. The FTC and DOJ are also suggesting more disruptive remedies among technology companies, which may further impact M&A activity in the future. In a Harris-led administration, this trend may continue, negatively impacting the Technology sector. In a Trump-led administration, a more lenient FTC could facilitate a more active dealmaking environment in the Healthcare sector.

In conclusion, the policy differences between Vice President Harris and former President Trump could have significant impacts on the economy and financial markets, particularly for specific sectors. However, it is essential to maintain a long-term perspective and consider the broader economic trends, as the US economy and stock market have demonstrated remarkable resilience and growth over the years, transcending partisan politics. As an investor, it is crucial to stay informed about the potential impacts of election outcomes on your portfolio and make well-informed decisions based on data-driven analysis and expert insights.