Between the Devil and the Deep Blue Sea.

November 8, 2016

An Election Day Lament
Americans awoke today somewhere between the devil and the deep blue sea.
For all the undoubted genius of our constitution, it is difficult to accept a defective primary process that ended in these choices.
For of democracy's formats, Americans have always been steadfast in the knowledge that ours was best. And yet, 320 million Americans have to choose between Hillary Clinton and Donald Trump.
Spam and liver do not equate to palatable choices.
Nor do I wish to hear from those pandering nitwits who contend that we need not choose at all.
Not voting is, in fact, a decision. One of omission. That places your vote into the hands of those more proactive. Those who will not enter the polling place with your family's best interests in mind.
Perhaps Andrew Roberts best summarized today's choices in comparing Western democracy to Beijing's China's corporate statism in the WSJ, writing:
"...the democratic model of the West, whose leading democracy today presents its people with a choice between a preposterous, petulant monster of self-regard with deep, dark psychological flaws on one side, and on the other a proven failure whose views float with the polling data and whose word of honor cannot be relied upon."
Makes you want to speed to a polling place. Still, choose we must.
One candidate brings much government experience and a previous president to the task. Though she's run opposite that of the way he governed. And represents much of what we find reprehensible about our nation's capital, and those who inhabit it.
The other candidate signifies much of the distasteful aspect in the ego. Self focused. Petulant. Not politically correct.
Still, he represents an unmistakable torpedo into the broadside of D.C.'s fetid symbiotic establishment duopoly. Loudly communicating that the electorate has had enough. And will stand for no more self dealing nor self enrichment. Not while 80 percent of the population continues to patiently await a semblance of progress absent these last 20 years.
Both candidates, pros and cons.
Regardless of today's outcome, the nation moves forward. Thanks to a Bill of Rights. First Amendment. Congress. Supreme Court. Separation of powers. And the instincts of the American people.
It is troubling that our concept of Democratic values has been questioned as to whether it is the superior system. Be it by Bernie Sanders' young socialists, or by supporters of the more perverted forms seen around the globe. Totalitarian statist-capitalist models run by autocrats in Russia. China. Iran. Their leaders appear strong. But only by keeping their peoples weak.
Though we'd certainly prefer it, great presidential leadership has never been a prerequisite for American success.
There were no formidable presidents from Lincoln's 1865 assassination to Teddy Roosevelt's election in 1901. Yet, in today's era of anemic growth, one would hope for leadership choices comprised of the highest moral fiber.
And for all the Federalist Papers say about preventing tyranny in the U.S., they say nothing about the prevention of corruption and vulgarity. Perhaps because the founders never envisioned a moment when such options might be the only choices.
Alas, let's not despair. For these periods tend to be cyclical. With the blasé oft leading to greatness. As the tragedy of Kennedy, the deleterious vision of LBJ, and the impassive meanderings of Carter led to Reagan's ' City on a Hill.'
The United States will learn from and prosper in spite of its choices. The nation's strengths will see her through. As it did with Harding. Johnson. Pierce. And Wilson.
And perhaps one of today's candidates will, in fact, evolve into the statesman leader to which we so aspire. Either way, we always hope for the best, yet prepare for the worst.
Some Portfolio Positioning
So we recommend the following do's and don'ts. Proffered to cover one's derriere despite today's election outcome.
Should Hillary Clinton Win:
-Renewable Energy wins... as she supports the Paris climate deal and the Clean Power Plan to reduce U.S. greenhouse gas emissions. Helping investment vehicles like the VanEck Vectors Global Alternative Energy index (GEX), and the companies of which it is comprised.
-Health Care wins... as she has said she would extend the Affordable Care Act and continue attempting to expand health care coverage for all. Helping investment vehicles like the Health Care Select Sector SPDR (XLV) and the companies of which it is comprised.
-Mexico wins... with the Mexican economy struggling, the nation does not welcome the idea of Trump making good on his pledge to renegotiate NAFTA, nor tackle immigration reform in a way that is detrimental to Mexican economic interests. Helping investment vehicles like the iShares MSCI Mexico ETF (EWW), and the companies of which it is comprised.
-Financials, however, lose... as Clinton has said that she intends to assess a "risk fee" on the largest American financial institutions. As well as to appoint officials to carry out more regulatory oversight of Wall Street and the financial sector. Causing weakness, most likely, in banking, brokerage and other finance-related equities.
Should Donald Trump Win:
-Natural Gas wins... as his campaign comments suggest he would cut back on energy sector regulations. Resulting in more natural gas exports. Helping investment vehicles like the First Trust ISE-Revere Natural Gas Index (FCG) and the companies of which it's comprised.
-Financials win... as Trump would craft a softer regulatory environment for the financial sector -- as opposed to the more stringent one that would have been crafted by his opponent. Helping investment vehicles like the Vanguard Financials ETF (VFH) and the companies of which it is comprised.
-Construction and Engineering wins... with President Trump relying on what he knows best - construction and development - to power the U.S. economy back to a higher growth trajectory. Helping investment vehicles like Fluor Corporation (FLR), Jacobs Engineering (JEC) and Chicago Bridge & Iron Company (CBI), which would likely garner rich opportunities as each stewarded mega-development projects nationwide.
-Asian Investments lose... with Trump having made a number of protectionist threats. Most of which would be bad news for Asian economies.
-Health Care Investments lose... as Trump has assured his supporters he would terminate the Affordable Care Act, steering much of the health care industry into a very uncertain state of affairs.
Regardless of the Next President:
-Alternative Investments win... as these low-correlation, absolute-return seeking investments will continue to buoy portfolios despite the trendlines of the stock and bond markets.
-Defense Contractors win... as both candidates have promised to rebuild the military. Which usual leads to capital flows towards the navy, army and air force. Benefiting those companies that manufacture weaponry, aircraft and ships. Helping investment vehicles like the iShares U.S. Aerospace & Defense ETF (ITA), and the companies that comprise it.
-Precious Metals win... as the uncertain times that will be faced by either candidate will continue to create volatility and questions about the directions of stocks. Making disaster hedges like precious metals and PM mining companies solid bets. Helping investment vehicles like the VanEck Vectors Gold Miners ETF (GDX) and the companies of which it is comprised.
-Infrastructure Investments win... as both candidates have promised to spend on infrastructure like roads, bridges and waterworks. So companies involved in repairing, building and maintaining such infrastructure will benefit greatly as the new president attempts to solve the nation's "infrastructure gap." Helping investment vehicles like the PowerShares Dynamic Building & Construction Portfolio (PKB) and the companies of which it is comprised.
In the end, neither candidate will have too great an impact on the direction of markets. As the market, more than anything else, prefers to see one party in charge of the legislature and the other in charge of the executive office. So permitting neither to screw up too much during their brief stints in office.
As Max Lucado said, "It seems that election season is just a Petri dish for anger and cynicism." A Petri dish, we would remind you, that should - God willing - be finished come the morn.

Securities offered through Dempsey Lord Smith LLC – Dempsey Lord Smith LLC, Rome, GA Member FINRA / SIPC / MSRB.

Advisory Services offered through Dempsey Lord Smith, LLC, an SEC Registered Investment Advisor. Clearing through and accounts held at Charles Schwab & Co., Inc.

Dempsey Lord Smith, LLC nor Hyde Park Wealth Advisors LLC provides tax or legal advice and you should consult your accountant and/or attorney if considering an investment of this type. Hyde Park Wealth Advisors LLC is not controlled by or a subsidiary of Dempsey Lord Smith LLC. Investing in Alternative Investments come with a variety of risks that could result in a complete loss of principal investment.

Alternative Investments offered as private placement securities are offered only to qualified accredited investors via confidential private placement memorandum. Income and returns are not guaranteed and there are no assurances investments will meet their stated objectives.

© 2024 Hyde Park Wealth Advisors. All Rights Reserved