What are some strategies for investors to optimize their portfolios before the 2024 presidential election?

As the 2024 presidential election approaches, investors are preparing for market volatility due to uncertainty about which of former President Donald Trump or Vice President Kamala Harris will win in November.

"Seema Shah, chief global strategist at Principal Asset Management, emphasized the importance of remembering the noise and volatility surrounding elections. According to her, the fundamental drivers of markets are earnings growth, inflation, and the actions of the Federal Reserve."

The election outcome may present investors with different economic policies, allowing them to strategize their portfolios accordingly.

"According to John Mowrey, chief investment officer of NFJ Investment Group, the upcoming election cycle will result in both winners and losers. The outcome will depend on factors such as changes in corporate tax rates, regulation, and geopolitics."

Some experts predict that small-cap stocks may perform better under a second Trump administration.

"According to Paul Hickey, co-founder of Bespoke Investment Group, small caps outperformed the S&P 500 by double in the initial months following Trump's election in November 2016. However, during his administration, the performance of small caps was aligned with that of large caps, with only a slight disparity. Currently, there is a significant difference in performance between mega caps and all other categories."

Some analysts predict that the renewable energy sector would benefit under a Harris presidency, as she plans to build on the investments of the Biden administration.

"The most significant aspect of Harris's leadership would be safeguarding and executing the Inflation Reduction Act, a crucial legacy of the Biden administration, according to Stephen Myrow, managing partner of Beacon Policy Advisors. Although much of it remains unimplemented, this is crucial for wind and solar, biofuels, nuclear, and hydrogen."

The video above discusses which sectors and industries will benefit the most under each presidential candidate and provides advice for investors on how to position their portfolios before the 2024 election.