Historically, political parties have benefited certain industries more than others during their respective terms in office.
Best Investments During Democratic Terms
Healthcare: Managed care and pharmaceuticals are especially standouts here for Democrats. Their support for social programs, such as Medicare and the more recent "Obamacare" have traditionally sent more dollars to these areas of the health industry.
Alternative energy: Democrats believe in extending beyond oil and coal and into alternative sources of energy, such as wind and solar.
Best Investments During Republican Terms
Financial sector: Republicans have generally favored looser regulations for large financial institutions, such as big banks and insurance companies, than their Democratic counterparts. For example, many Republicans have voiced their opposition to the tight regulations on big banks set forth in the 2010 Dodd-Frank bill.
Defense sector: A large part of Republican platform in recent history has been to maintain a healthy defense and military. Whether or not Republicans "speak softly," they are likely to "carry a big stick" when in power.
Dividend-Paying Stocks: It is likely that the tax rate on capital gains and dividends will move higher in the not-too-distant future. This scenario is more likely under Democratic rule than Republicans so look for your dividend-paying stock funds to do better under Republican rule.
Stock Market Overall: History shows that stocks and GDP outperform under Democrats. According to McGraw-Hill’s S&P Capital IQ, the S&P 500 has rallied an average of 12.1% per year since 1901 when Democrats occupy the White House, compared with just 5.1% for Republicans.
How to Invest: The best way to get direct exposure to certain industrial sectors, such as Financial, Health, Defense and Alternative Energy is through sector funds and Exchange Traded Funds (ETFs).
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
