What’s The Best Portfolio For a Trump Presidency?

Stocks/ETFs to Consider

A Trump presidency could impact markets and sectors in particular ways based on policies he has previously supported, though unforeseen factors may also influence outcomes. If we look at historical trends and policy priorities, here are some sectors and types of investments that may do well:

1. Energy (Traditional Fossil Fuels)

• Rationale: Trump has traditionally supported oil, natural gas, and coal industries, favoring deregulation and pushing for energy independence.
• Examples: Consider oil and gas producers like ExxonMobil, Chevron, or ConocoPhillips, as well as ETFs such as the Energy Select Sector SPDR Fund (XLE).

2. Defense and Aerospace

• Rationale: Defense spending tends to increase under administrations focused on strengthening the military, which Trump has advocated.
• Examples: Stocks like Lockheed Martin, Northrop Grumman, Boeing, and Raytheon Technologies could benefit. For broad exposure, iShares U.S. Aerospace & Defense ETF (ITA) is a good option.

3. Financial Services

• Rationale: Trump has shown support for deregulating the banking industry, which can improve profitability for banks.
• Examples: JPMorgan Chase, Bank of America, Goldman Sachs, and Citigroup may perform well. ETFs like Financial Select Sector SPDR Fund (XLF) offer sector-wide exposure.

4. Infrastructure and Construction

• Rationale: Trump has been vocal about the need for infrastructure improvements, which could create demand in construction and materials.
• Examples: Caterpillar, Vulcan Materials, Martin Marietta Materials, and Nucor are potential stocks. The iShares U.S. Infrastructure ETF (IFRA) offers diversified exposure.

5. Manufacturing and Industrials

• Rationale: Policies aimed at reducing regulations and bringing manufacturing back to the U.S. could benefit companies in industrial sectors.
• Examples: Stocks like 3M, Honeywell, and General Electric may benefit, as well as ETFs such as Industrial Select Sector SPDR Fund (XLI).

6. Healthcare (Pharmaceuticals)

• Rationale: Trump has generally supported lowering drug prices without extensive regulation, which may benefit large pharma companies.
• Examples: Look at companies like Pfizer, Johnson & Johnson, Merck, and Eli Lilly. Broad exposure can be gained through ETFs like the Health Care Select Sector SPDR Fund (XLV).

7. Real Estate and REITs

• Rationale: Lower taxes and deregulation can benefit real estate markets, particularly commercial real estate, if economic growth is strong.
• Examples: Real estate investment trusts (REITs) like American Tower or Simon Property Group might be appealing, as well as ETFs like Vanguard Real Estate ETF (VNQ).

8. Precious Metals and Commodities (as Inflation Hedges)

• Rationale: Concerns about inflation or trade wars could make gold and commodities attractive as safe-haven assets.
• Examples: Consider SPDR Gold Shares (GLD) or miners like Newmont and Barrick Gold.

Final Considerations

A portfolio designed for a Trump presidency could focus on sectors aligned with his policies, such as energy (oil, gas, and coal), defense, financial services, infrastructure, manufacturing, and healthcare, benefiting from deregulation and tax reforms. Companies like ExxonMobil, Lockheed Martin, JPMorgan, and Caterpillar would be key picks, along with ETFs like XLE (energy), ITA (defense), and XLF (financials). Additionally, real estate (REITs) and precious metals (e.g., Simon Property Group, SPDR Gold Shares) would provide stability and a hedge against inflation, making for a diversified, growth-oriented portfolio. However, markets are at all time highs, so caution and proper risk analysis on market condition’s still needs to be carefully considered.