I have a confession to make. I love American Presidential politics the same way that many people love sports. It’s my March Madness — but it lasts almost an entire year. 

2016 is turning in to one of the strangest elections I’ve ever watched. It’s a bit like a 50 car pileup; you know you shouldn’t look but you just can’t resist.

#-ad_banner-#On the GOP side, the biggest ruckus is being kicked up a by billionaire real estate mogul turned reality TV star with zero government experience who is running a populist themed campaign that defies conventional wisdom on a daily basis. The Democratic choices are no less weird with a geriatric, self-avowed, socialist senator who is also running on an angry, populist platform and a former Secretary of State with a politically dynastic name and trust issues.

While the media devours this circus, the market jury is still out till at least summer, when the picture should be a bit clearer. In the meantime, smart investors should consider these moves to make sure their portfolios will be ready to weather the politically induced chaos should it arrive.

3 Areas To Avoid In An Election Year
By nominating convention time (held in July for both the Republicans and the Democrats), candidate platforms should be articulated, so it should be obvious which sectors are at risk. My guess would be that the healthcare industry will have a target on its back with sniping coming from both sides of the aisle. While the GOP pounds the table for the repeal of Obamacare, the Democrats have voiced a desire to evolve closer to some form of single payer system. I’m still a fan of value priced big pharma stocks, but there’s still a little too much uncertainty to make any money this year. 

Financials are also a sticky wicket. The biggest threat comes from the populist left, where there have been calls for increased regulation and continued talk of breaking up the “too big to fail” institutions. Big bank stocks should be viewed with caution.

Lastly, energy is also a minefield right now. The left will continue to push its clean energy agenda. The right is also experiencing a rift as government waste reformers rail against corn subsidies, jeopardizing ethanol as a fuel additive. Plus, not to state the obvious, but the fundamentals of the whole sector are just too perilous to even attempt to pick some sort of winner.

3 Potential Winners This Season
So where do investors go during a disruptive campaign cycle? Here are three names that make sense.

Wal-Mart Stores (NYSE: WMT): Love ’em or hate ’em, Wal-Mart is the largest retailer in the world with an incredibly deep moat. Every week over 100 million people walk into a Wal-Mart store. The company controls 30% of U.S. supermarket industry. Its warehouse retail business Sam’s Club is the second largest nationally, with annual sales of $56.8 billion. 

As the nation’s largest private employer, Wal-Mart raised its minimum employee wage to $10 per hour at the beginning of the year, getting in front of hot button “living wage” campaign issue. With that regulatory spotlight deflected, the retailer should benefit from increased consumer spending brought on by lower gasoline prices. The fundamentals are rock solid with consistent return on equity (ROE) of 20% and sturdy annual cash flow growth of 10% over the last 10 years. Recently, the stock price has hovered in a range in the mid 60’s with a forward PE of 15.7 and a 3.04% dividend yield.

Cisco Systems (Nasdaq: CSCO): As the world’s largest supplier of high performance computer networking equipment, Cisco could be in the running for the title “World’s Most Boring Tech Stock”. Since the 90’s and the subsequent bursting of the Tech Bubble, the company has matured into to the entrenched, dominant player in its space with 60% market share in ethernet switching and an over 50% market share of the router business. And as the “internet of things” evolution continues, the need for networking becomes almost a utility.

The company’s metrics are consistently stellar, with $50 billion in cash on the balance sheet, five year average annual cash flow growth of 9.5% and average annual dividend growth of 113% over the same time period. Shares trade closer to their 52-week low than their high at around $26 with a low forward PE of 11.3 and a dividend yield approaching 4%.

Genuine Parts Co. (NYSE: GPC): Wholesale automotive replacement parts distribution may not be the sexiest industrial sector out there, but it sure does pay the bills. You may know Genuine Parts better through one of its brands, NAPA Auto Parts. But while the company is the largest independent distributor of aftermarket auto parts, its footprint represents only about 6% of the entire market which, nationally, is highly fragmented. This means that there’s plenty of opportunity for growth through consolidation.

There’s also room for growth at the organic level. The average age for most passenger vehicles in the United States is 11 years. Combine that with increasing technological/mechanical complexity, and the long term case for owning GPC is compelling. In the near term, strong financial stewardship of the company has resulted in a low debt to capitalization rate of just 13% and 60 years of consecutive dividend increases. Shares trade at around $90 with a forward PE of 19.2 and a 2.8% dividend yield. Sometimes, quality comes at a slight premium.

Risks To Consider: Although these stocks represent extremely sound, operating businesses, they are widely held, bellwether names. They will be subject to any widespread market volatility. However, their defensive positions and successful operating histories should help to preserve long term value.

Action To Take: Stock markets and looming political change usually have a volatile relationship. Election year stock bets can be dicey. For investors looking to put money to work in equities, these three names offer some insulation from the approaching volatility thanks to their deep moat businesses and consistent long term operating execution. Share prices are also at historically attractive levels.

P.S. We’re locking in a paycheck of $15,100 for every $100,000 we invest… and our dividends keep growing… sometimes overtaking our original stock price. Invest like this and it just might change the way you think about investing forever.

Disclosure: Adam Fischbaum holds these stocks in managed client accounts.