Prediction: These stocks will rise in 2025, whether Kamala Harris or Donald Trump is president

Who will be the next president of the USA? Flip a coin. It’s so close between Vice President Kamala Harris and former President Donald Trump.

Investors who buy stocks now based on which candidate they think will win could be taking a big risk. A better bet is to find stocks that should do well regardless of how the election plays out.

But what actions are suitable? I predict two stocks will rise in 2025 regardless of whether Harris or Trump is president.

Winners anyway

The first stock I expect to deliver big gains next year is Dr. Horton (DHI 1.02%). Founded in 1978, the company ranks as the largest homebuilder by volume in the US. It operates in 33 states.

Shares of DR Horton have spent much of 2024 in negative territory. However, the stock has taken off since early July and is now up more than 20% year-to-date. This solid performance follows a 70% gain in 2023.

The other stock I predict will rise next year with either Harris or Trump in the Oval Office Real estate income (A 1.16%). This real estate investment trust (REIT) has been operating for 55 years. It owns 15,450 properties leased to tenants representing 90 industries.

Like DR Horton, Realty Income’s performance through most of the first half of this year has been poor. Still, like the homebuilder, Realty Income shares have rebounded strongly in recent weeks.

Why DR Horton and Realty Income?

The common denominator between the two is that both should benefit from lower interest rates.

Federal Reserve Chairman Jerome Powell has strongly hinted that an interest rate cut is on the way. Inflation is trending in the right direction. The labor market is cooling. These two factors are exactly what the Fed wants to see to lower interest rates.

Lower interest rates usually cause mortgage rates to fall, and when mortgage rates fall, Americans are more likely to buy new homes. That’s music to the ears of DR Horton, which closed on 94,255 homes in the 12 months ending June 30, 2024.

Realty Income likes to see lower rates because they lower the company’s borrowing costs. REITs typically finance new property purchases with debt. When rates fall, it makes sense that REIT stocks often rise.

Looking beyond interest rates, both of these stocks have solid growth prospects. DR Horton has a huge opportunity due to the US housing shortage, and Realty Income is eyeing a large European market for much of its future expansion efforts.

Some impact from the election

I truly believe that DR Horton and Realty Income will be winners regardless of whether Harris or Trump wins. However, it is not that the winner will not have any impact on the companies.

For example, Harris proposed providing significant financial assistance to promote the construction of new homes. She wants to offer tax incentives to homebuilders who sell “starter homes” to first-time homebuyers. The Vice President’s plan would likely provide a major advantage for DR Horton.

On the other hand, Trump is trying to lower the corporate tax rates from 21% to 15%, while Harris wants to increase the rates to 28%. Results for DR Horton and Realty Income could improve if the former chairman achieves this goal.

Of course, whether Harris or Trump can implement their proposals depends on which party controls the US Congress. And you can probably flip a coin for that result, too.