How to invest during a heated Trump-Clinton race

Published Thu, May 5 20161:17 PM EDT

Donald Trump laid out his 100-day plan for the economy on CNBC on Thursday. From favoring low interest rates, to possibly replacing Federal Reserve chair Janet Yellen, to renegotiating the country's trade deals, the billionaire businessman and presumptive GOP presidential nominee made the case for why he is the best candidate to revive the stalled economy. Investors have so far not reacted with their money to Trump's stated plans, though comments from Democratic presidential front-runner and favorite to win the presidency Hillary Clinton have been moving markets for more than seven months. Back in September, Clinton's tweet about "price gouging" by drug-makers sent biotech stocks tumbling. But if Trump gains any momentum as the general election approaches, his words could start to sway asset prices. So we asked some members of CNBC's "Squawk Box" Platinum Portfolio their political proofing strategies for this volatile run-up to Nov. 8. How will a Trump presidency influence your investing decisions? David Katz , Matrix Asset Advisors: We are wary of Trump's comments in regard to business, the economy, the budget, global trade and relations with our international trading partners. In addition, in many cases, the details of the positions are not that clear. Overall, we would have concerns about the economy and the equity market if we thought a Trump presidency were likely. His comments in regard to drug pricing add a significant level of uncertainty to that area as there doesn't seem to be a clear game plan. Comments on international trade and a trade war with China would be significantly negative and are very worrisome. At the moment, the financial markets (and we) are assuming a Hillary Clinton presidency as the most likely outcome, so we are not factoring in a Trump victory in our investment process. Louis Navellier , Navellier & Associates: If Trump wins, there will be a bit more uncertainty, but I am sure everything will be fine. I would expect the stock market to rally on the hope that the U.S. would be more pro-business under Trump. Trump would be better for domestic energy. Paul Meeks , tech investor: You would think that the Republican would be more pro-business and pro-markets, but that's not the case here in my opinion. I worry more about a Trump presidency, because there's higher uncertainty there. How will a Clinton presidency influence your investing decisions? Meeks: We know that Clinton will negatively impact many health-care companies given her past and her rally against high drug prices. Her presidency would make me wary about that sector and everything else in its path. Katz: We think a Clinton presidency would be good for the economy and OK-to-good for the stock market. As she has moved to the left during the primaries, she has created an additional level of uncertainty, but based on her actions and policies over time and her full stump speeches, we believe she is thoughtful, pragmatic and would try to engage in policies that are aimed at helping the poor and middle class, but not to the detriment of business. So we would not make any asset allocation changes or sector or industry changes based on a Clinton presidency. There is greater uncertainty in drug pricing and health care, but this should be manageable and not punitive, and, we believe, is largely priced into the drug stocks. Navellier: If Hillary raises capital gain taxes like she promised, I have a few tricks up my sleeve to help investors, like investing in growing mutual funds with reduced capital gain distributions. That is the only change I anticipate. Read More Pro talks: Jim Chanos on shorting, Tesla and Enron From a short-term standpoint, what is your advice for investors? Katz: Expect volatility. Buy the sell-offs and don't chase the rallies. At the time, we would not change your investment allocation based on a Trump-Clinton race. Navellier: The stock market has traditionally rallied into the November presidential election as everyone runs around and sucks up to the voters. Traditionally, this suck-up factor lifts consumer sentiment, which in turn also helps to lift investor sentiment. Meeks: Short term, I'm uncertain and cautious. As we hear the debate between Trump and Clinton, then their plans should become clearer ... at least Trump's. For me, taxation is the biggest issue. Which stocks are resilient/not impacted by the election? Katz: Utilities, consumer products and telecom stocks are the least impacted by the upcoming election. But we think utilities are overvalued and would be selling into their strength. We greatly prefer select consumer product companies and telecom. Meeks: Stay in U.S. lower-growth companies, consumer staples. On the tech side, which I know best, companies to be investing in are cloud computing and security companies.

Donald Trump and Hillary Clinton

Reuters

Investors have so far not reacted with their money to Trump's stated plans, though comments from Democratic presidential front-runner and favorite to win the presidency Hillary Clinton have been moving markets for more than seven months. Back in September, Clinton's tweet about "price gouging" by drug-makers sent biotech stocks tumbling.

But if Trump gains any momentum as the general election approaches, his words could start to sway asset prices. So we asked some members of CNBC's "Squawk Box" Platinum Portfolio their political proofing strategies for this volatile run-up to Nov. 8.