Don't adjust portfolios now: strategist

First Franklin Financial's Brett Ewing tells Reuters' Fred Katayama it's better to adjust investment portfolios after the election results come in. He also identifies some sectors that he thinks will perform well regardless of who wins the White House.

Video Transcript

FRED KATAYAMA: Wall Street paring its big Monday morning gains. NASDAQ right now in the red.

Let's get some perspectives on how you should adjust your portfolio just ahead of Election Day. We're joined by Brett Ewing of First Franklin Financial in Tallahassee in the battleground state of Florida. Welcome back, Brett.

BRETT EWING: Thanks, Fred.

FRED KATAYAMA: So, Brett, are you-- just curious. With your portfolios, are you betting on a Biden win or setting up for a Trump win?

BRETT EWING: Interesting question. I think, you know, I've fielded many, many calls from our investors over the last month as you can imagine, Fred. And this is a very exciting election. We're certainly a day away. Just took a few calls before we got on here. People were worried. What should I do? What should I do?

And, you know, what I tell them to do is really just really focus on keeping that long-term perspective right here. I don't think anyone needs to dive in and make a radical change right here and right now the day before the election. I believe that would be a little cavalier.

Also, I'd like for your investors to know, you know, there is a theory out there that stocks can go up no matter who wins the election. That is possible. It's not talked about a lot, but it's very true.

I think that one thing that I look at that I'm really focused on is, you know, if it's a who-- whichever wins the president, Biden or Trump, what happens to the Senate? because I really think that's a dramatic difference, and that sets the tone on actions that you would take with your portfolio, in my opinion.

FRED KATAYAMA: All right, Brett, are there any stocks or sectors that you think will do well regardless of who's the winner?

BRETT EWING: I do. I still believe technology is a play no matter who wins the election, OK? And I do like health care. I think that health care and medical devices is a very good area to focus in. No matter who's president, that area seems to really compound nice over time. So I really like that.

You know Trump were to win the office I think you would want to probably move a little bit more into the energy sector. He is the oil-and-gas president, if you will. And I think that he is going to continue to put-- show that he's very supportive of that industry. Whereas if Biden were to win, I think renewables would be a stronger play from that perspective.

FRED KATAYAMA: So would you then recommend to investors that they make their moves after Election Day?

BRETT EWING: I think that-- I think, again, that's why I brought up the Senate race earlier. I think it's important that, you know, making too big of a decision or a radical change prior to knowing the makeup, right, of Congress and the presidency-- I, personally, if you want to take a little risk off the table, that's fine. Don't make extreme things, but I like to make my moves afterwards.

FRED KATAYAMA: All right, let's say since you talk about, you know, the Senate, what if it's a blue wave? What sectors do you expect will do well?

BRETT EWING: I think if you-- I think if this-- I don't know if that's priced in the market a completely blue wave here, and I think that that would be-- you know, markets really do like when Congress is not able to do whatever they want. And so a complete blue wave-- the policies between the two candidates are so different. I think we could have a lot of volatility right after the election.

But I do believe markets would recover and get back to an all-time high. No matter who wins the election, I still have my market forecast at 3,650 by year end.

FRED KATAYAMA: All right. What if it's a contested election? What happens to stocks?

BRETT EWING: I feel that that would be a very bad scenario for the country and the world, and I do feel that-- I think a lot has been talked about that going into this election. I'm hoping that it's one of those events that certainly doesn't play out. But I would expect there to be a lot of chop in this market fighting through a contested election.

FRED KATAYAMA: Meaning what, a bias on the downside?

BRETT EWING: I do believe that we'd have a lot on the downside. I really do, Fred.

FRED KATAYAMA: All right, but you're sticking to 3,650 for the S&P 500 for year end.


FRED KATAYAMA: All right, and what's going to buoy that back up by year end?

BRETT EWING: Well, I think-- look, the Federal Reserve is basically unlimited commitment to these markets, so let's not discount that. People try to-- they say it, but do they really understand that?

We really have unlimited support coming out of the Fed and throughout the credit markets. If there was any little fire starting, they're going to put it out real quick, OK?

And the second thing is on the fiscal stimulus. No matter who wins the election, I do believe we're going to have some fiscal-stimulus talks and something really implemented here in the next few months no matter who wins the election. The size of that, whether it's, you know, more infrastructure or not, but we'll see. I do believe that we're still going to get a fiscal stimulus either way.

FRED KATAYAMA: All right, thanks. We'll be watching. We'll know a little bit more, hopefully, tomorrow. Thanks a lot, Brett.

BRETT EWING: All right. Thanks, Fred.

FRED KATAYAMA: Our thanks to Brett Ewing at First Franklin Financial. I'm Fred Katayama in New York. This is Reuters.