If the Democrats Win: A Sector-by-Sector Look
A Democrat victory will affect the prospects -- or Wall Street's expectations -- for selected industries. But getting sector bets right isn't easy.

If the polls and the pundits are right, the Democrats will take over the House of Representatives next January, and they may be in control of the Senate as well. So is it time to adjust your portfolio on the basis of what the Democrats might do once they're in power? Perhaps, but playing sector politics is far easier said than done.
Consider the raising of the federal minimum wage, a Democratic priority and a measure that even some Republicans will likely support. A higher minimum would probably be seen as a negative for shares of McDonald's and other fast-food companies. But populous states such as California, Florida, Illinois, New Jersey and New York already require higher wages than the federal minimum of $5.15 per hour. Our guess is that another scare about mad-cow disease would hurt Mickey D's more than higher starting wages, which reduce employee turnover anyway.
A Democratic rout on Election Day could mean cuts in military spending. Companies such as Northrop Grumman and Oshkosh Truck could suffer if defense spending is reduced. So could their shareholders.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Democratic legislators are expected to propose a sharp reduction in student-loan interest rates, which the government boosted a few months ago. Presumably, this would make a few investors skittish about investing in SLM, the former Sallie Mae.
And Wall Street believes, with good reason, that the Democrats want to rewrite the Medicare law so that the government could bargain for (presumably) lower drug prices with pharmaceutical manufacturers. In 2003, the drug makers persuaded the Republican-led Congress to block such a provision. Even if Congress doesn't approve such legislation soon or ever, investors in big pharma may be facing a headwind -- unless, of course, the drug makers can push fresh winners out of their labs.
Democrats are reputed to be friendly with Fannie Mae and Freddie Mac, the mortgage repackagers, both of which have been closely scrutinized by Congressional Republicans in recent years. Shares of both government-sponsored enterprises have climbed about 20% in the past three months. It's hard to make a fundamental case for the stocks, given that Fannie and Freddie make their profits from the spread between long and short interest rates and by reselling mortgages to investors in its securities. But the interest-rate spread is almost flat and mortgage volume has slowed with the weakness in housing sales. So perhaps it is politics that is driving the stocks higher.
Outside of these examples, it's hard to see where a leadership switch in Congress presents you with a do-it-now action list. Keep in mind that a Republican, George W. Bush, will remain in the White House no matter what happens on Election Day. He'll be able to wield his veto against truly obnoxious anti-business legislation, and it's hard to imagine a Democratic landslide so great as to make Congress veto-proof.
Talk of sweeping health-care reforms, such as national health insurance, or a rollback of some tax cuts may make headlines. But Washington is famous, as the song goes, more for talk than for action. Ultimately, what powers the prices of the overwhelming majority of stocks are such basics factors as earnings, new products and the ability of companies to expand to new markets.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kosnett is the editor of Kiplinger Investing for Income and writes the "Cash in Hand" column for Kiplinger Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.
-
Standard Deduction 2026 Amounts Are Here
Tax Breaks What is the standard deduction for your filing status in 2026?
-
New 2026 Tax Brackets Are Set: What to Know Now
Income Tax The IRS has adjusted federal income tax bracket ranges for the 2026 tax year to account for inflation. Here's what you need to know.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have Today
Bank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have Today
ORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity Risk
Amid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have Today
Sherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have Today
UNH stock was a massive market beater for ages — until it wasn't.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How to Invest for Fall Rate Cuts by the Fed
The probability the Fed cuts interest rates by 25 basis points in October is now greater than 90%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?
Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?