This coming Tuesday marks the end of the Presidential election cycle. A lot has been made of the coming election and its impact on markets both domestic and abroad. Many have attributed the weakness felt across markets this week to investor jitters as whether Trump will best Hillary. It seems to be a close race, which is one reason why people are nervous.
Forget the politics for a moment and turn to your portfolio. Someone is going to win and their will be a real and/or perceived impact on certain industries and currencies. Whether it’s a short-term or long-term trend that is started from the election, you want to be prepared to either get in or out of a position based on the election’s outcome.
Keep in mind the companies listed are not the be all and end all of investments. Many similar public companies might be available that provided similar services. This isn’t a ‘best of’ list. This is a list to generate ideas from.
We’ll start with the scenario of Donald Trump winning. If Trump wins here are some investments I see ‘winning’ as well.
- Private Prisons – Trump wants to cut government waste. One way he might do so is to push to privatize more prisons.
- Cement Producers – A play on a push for greater infrastructure spending and Trump’s message of building a wall between the border of the U.S. and Mexico.
- Better Veterans Medical Services – An improvement in VA medical services and a shift from the Affordable Care Act for the civilian population.
- Coal Power – Coal as an energy source has been out of favor for at least 8 years. Bets would be that coal’s perception would change under a Trump administration.
- Currency – Changes in trade agreements could have a significant impact on currency prices. Changes also lead to uncertainty in the markets.
- Aluminum – Accusations of Chinese dumping of aluminum in the U.S. and thus hurting the margins of U.S. producers has been noted many times by the Trump campaign.
- Defense – An increase in defense spending. Make America strong again.
- For Profit Education – Trump has supported and believes in private educational services. This group has recently come under regulatory attack by the Federal government.
In the scenario that Hillary Clinton wins, here are the investment areas I see as ‘winning’.
- Currency – Clinton is seen as the keeper of the status quo for trade. This would benefit Mexico and Australia currencies that would both have greater confidence, if she wins. Note – No ETF for the Mexican Peso exists.
- Solar – Continued subsidies for the solar industry would continue to spur demand.
- Renewable Energy – Like solar, renewable energy has been a focal point in Clinton’s campaign messages.
- Infrastructure – Clinton has noted the need to reinvest in America’s infrastructure.
- Guns – This investment would be based on the fact that many believe that if Clinton wins gun restrictions will increase. Therefore, they will buy before such restrictions arrive.
- Military – Clinton has often been dubbed by political observers as hawkish. A number of messages she has sent to other countries during the election reinforce this notion. Military spending would logically follow.
- Healthcare – Under Clinton it is assumed that the Affordable Care Act will continue, thought reforms may occur.