Portfolio Hedging for a Kamala Victory

316: Debate Review & State of Markets

Good morning folks.

Today we remember all of those lost in the dastardly attacks on September 11th 2001. Episode 2 of the Risk On Podcast was released this morning, in it we speak to the lasting impact this event had on the US and world.

The US Presidential Debate aired last night on ABC between former President Donald Trump and Democratic presidential candidate Kamala Harris. Quite a bit of content to discuss — namely the clear bias from the ABC moderators and what I would reluctantly call a Kamala win. We will get to that toward’s the tail end of today’s post.

It would be disingenuous for me to parrot that Trump destroyed in this debate, he did not.

That being said we will cover many of the statements and claims made and dissect the impact media bias had on the optics of this highly anticipated match up.

More importantly to today we are going to discuss potential strategies for hedging your portfolio against a Kamala win in November. Markets are down today despite easing inflation in August — likely anticipating momentum for Harris. At the end of the day most of us should be more concerned with our financial prosperity and bands than the political shitshow unfolding around us.

Before we dive in wanted to touch on a new partner we are working with:

If you’re looking to recruit for the buyside or lateral to another bank, you might want to check out Megafund.io. They’re a new platform that offers you better visibility among headhunters, as well as access to a bunch of free model tests, case studies and more. They’re also about to launch a series of networking events with top funds, and a mock buyside interview service – all of which is completely free. They launched in August and already have over 400 candidates and 8 headhunters using the platform.

Some general market updates for this week:

• The White House says that the United States is 'turning the page on inflation' - (AFP/WatcherGuru)

• US inflation fell to 2.5 per cent in August — however don’t get too excited, CPI, the broad measure of goods and services costs across the United States, increased 0.2% in August

• US Treasury Secretary Janet Yellen has tested positive for COVID-19

• Amazon is set to eliminate hundreds of positions in California primarily at their distribution centers

• India reportedly leads in global crypto adoption for the second year in a row, according to a recent Reuters report

• The Kobeissi Letter is reporting as of 11:50am ET that the S&P 500 has now erased $700 billion of market cap

• The UK has introduced a bill to officially and legally recognize cryptocurrency as personal property (WatcherGuru)

• NVDA 0.00%↑ is ripping today on the heels of comments made by the CEO about chip demand

• PricewaterhouseCoopers’s (PwC) U.S. unit announced they will be laying off about 1,800 workers, its first formal layoff since the GFC, to address declining demand (MacroEdge)

Never before have we seen a presidential race with two wildly different approaches to how the country should be run and what steps will be taken to ensure the economic prosperity of our citizens. We have the rare combination of questionable Fed Policy, Geopolitical headwinds, and societal disruption layered on top of an economy that is delicate with surging national debt and sneaky inflation that is remaining stubborn in the cost of goods and everyday items.

People are feeling this.

Here we are concerned with trying to find the best moves to protect your money and guarantee it grows in the coming years regardless of who is elected.

Let’s begin with the stock market and the moves I am making to make sure I am hedged in the event of. a blue win, then we will move on to crypto and my candid thoughts on the debate.

---

Hedging Against a Kamala Presidency

Markets are mixed in the wake of the US debate.

SPY 0.00%↑ QQQ 0.00%↑ DOW 0.00%↑

Regardless of your political views or who you support — the likelihood of financial markets volatility in the event Kamala wins, particularly in crypto, is high. While the race is far from over I think we have approached a period in which investors would be wise to consider the impacts on financial markets in the event she is able to win in November.

Historically, the stock market has performed better, on average, under Democratic presidents compared to Republican ones. Over the long term, the S&P 500 has generally seen higher annualized returns during Democratic administrations. However, stock market performance depends on numerous factors beyond just political leadership, including economic conditions, global events, and policy decisions.

This makes it important to consider the broader context when evaluating market trends under different presidencies.

But I would argue given some of the far left policies that Kamala Harris and the Biden Administration have implemented or plan to implement we ind ourselves in a different environment particularly in regards to crypto markets.

So let’s talk specifics about ho I am thinking about hedging against a blue win in November. Haitians eating people’s pets and Venezuelan gangs is one thing — my bands and portfolio is entirely different.

Many will be blindsided and wish they had considered the implications the winner of the race will have on their financial holdings.