Here’s exactly how to prepare for a Trump or Harris presidency — and how to build a 5-part ‘election-proof portfolio’

• Stocks often struggle in September and October, especially in election years.
• The S&P 500 has broken that trend by soaring to record highs.
• Technical strategist David Keller shared how investors should position their portfolios.

What should be the scariest time of year in markets is instead a full-blown celebration.

US stocks usually fall in autumn. September has historically been the worst month for equities, and the four since the pandemic have been volatile.

And while October is often better for stocks, that hasn’t been the case in recent election cycles. In fact, the S&P 500 has only risen once in October ahead of the five presidential elections, technical strategist David Keller noted on a mid-October webinar about stocks and the election.

But the script has flipped so far this fall. Stocks seem to have missed the memo about those troubling seasonal tendencies and have made a precedent-defying run to new highs. The S&P 500 is in uncharted territory after steadily climbing by 8% since early September.

Although Keller has been blown away by the market’s return in the last few weeks, he believes investors shouldn’t get complacent before a potentially tectonic-shifting election.

“When we have an uptrend that lasts this long, when we have conditions that get this positive, maybe we start to think of contrarian signals that tell me maybe we’re starting to rotate lower,” Keller, the founder and top strategist at Sierra Alpha Research, said on the webinar.

The consensus view in markets is that there aren’t any big red flags for stocks or the economy, though huge run-ups don’t happen otherwise. As always, Keller said it’s worth staying on guard.

“The amount of warning you often get between the peak happening and a pretty significant downturn is pretty limited, right? You don’t have a lot of warning before that tends to happen,” Keller said. “And so thinking of ways you can protect yourself on the way up — particularly when you get signs of exhaustion that we’re already seeing in some ways — that’s where I think it can behoove us as investors to try to get ahead of those aggressive pullbacks, if possible.”

However, Keller has a hunch — based on various technical indicators that he follows — that this record rally still has more steam.

“The volume conditions, the breadth conditions, the sentiment conditions — all of which are getting sort of near that overheated, exhausted level, but not quite signaling a peak just yet,” Keller said.

How to invest for a Trump or Harris victory

Though past performance can’t predict the future, as the gains in the last six weeks prove, Keller still thinks there’s value in knowing how US stocks usually fare following elections.

“What usually happens in an election year is, November and December are pretty bullish for stocks,” Keller said. “Whoever’s elected, there’s a lot of optimism about what they’re going to do, there’s a lot of talk about change and improvement, and that optimism is usually reflected in the market.”

A substantial pullback is inevitable, in Keller’s view, though he’s not sure whether it will happen in the back half of October or in January, once the shine from the incoming president wears off.

“The beginning of the next year is where it’s sort of like the reality, the newly elected president, whoever it is, is now in office, now it’s up to them to actually implement some of these things.”

Speaking of implementation, Keller shared a detailed outline on his webinar of how certain parts of the market should perform under Donald Trump or Kamala Harris. The veteran strategist also talked about what he’s half-jokingly calling “Dave’s election-proof portfolio” of investments.

“I don’t know if I want to guarantee that it’s ‘election-proof,’ but I like to focus on which types of companies, which areas of the market stand to do well, most likely — regardless of who wins,” Keller said.

Below are Keller’s best ideas for either a Trump or Harris win, plus five investments that should be fine either way. Note that Keller isn’t a financial advisor, so these calls shouldn’t be treated as official advice.