During his campaign, President-Elect Donald Trump made hundreds of campaign promises. And although he hasn’t been entirely successful, he has certainly made a quick start in attempting to fulfill some of them. I’m not going to get into the political discussion—pro or con—but I am interested in which of Trump’s promises have the potential to create opportunities to profit in certain sectors of the stock market, and tell you which stocks to buy within those Trump-fueled sectors.
I just returned from the MoneyShow in Orlando, Florida, where I gave a workshop on just this subject. In the session, I highlighted several of Trump’s promises that I thought looked particularly appealing from an investment standpoint. I also had the chance to interview quite a few of our contributors and pick their brains as to the viability of some of the promises, as well as the particular sectors that may benefit from them.
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I’d like to share a few of these ideas with you today.
$550 Billion to Fix America’s Infrastructure
That’s the amount that Trump says he will spend to get our infrastructure in shape—and it’s needed. According to the American Society of Civil Engineers, in the next 10 years, we need to spend $3.3 trillion to repair our roadways, bridges, ports, water systems and other essential infrastructure.
Take our water infrastructure, for example. You probably know that most of our systems go back to the ‘50s and ‘60s. But what you may not realize is that these systems are in terrible distress. In North America, every single day, we average 850 water main breaks. And since records began in January 2000, 5,320,717 broken water mains have occurred.
If this infrastructure dream becomes a reality, you can expect a host of infrastructure stocks, including construction, water companies, airports and equipment makers to benefit.
Deregulation of Financial, Healthcare and Pharmaceutical Industries
Trump says he is going to repeal some of the more arduous regulations against financial companies. The financial crisis, subprime mortgage debacle and resulting recession were devastating to businesses, investors and consumers around the globe. More than four million people lost their homes from January 2007 to December 2011. The unemployment rate zoomed to more than 10%. And investors lost more than $16 trillion of their net worth from 2007 to 2009.
There’s no doubt that many banks and mortgage companies got in way over their heads. But the pendulum swung to an extreme—as often happens with crises—and costly regulation after regulation was levied against financial companies. The estimated cost of those added regulations to large banks is around $70 billion—expenses that decrease the profits that are paid to shareholders in the form of dividends and also depress stock valuations.
The largest banks will benefit the most here, but you can also expect to see some healthcare and pharmaceutical companies thrive from decreased regulations.
Resumption of Pipeline Construction
Trump has already given the order to resume the controversial Keystone XL and Dakota Access pipelines—both of which had been halted under the Obama administration.
In the long term, as the pipelines get built out, energy producers and operators, as well as transportation companies, will likely see a boon to their businesses. The stock market may very well award these companies in the short term, but as Wall Street’s Best contributor Roger Conrad, editor of Conrad’s Utility Investor, said to me at the MoneyShow, “Don’t be surprised if the projects don’t come out of the gate as quickly as expected, due to opposition at the state levels, eminent domain battles, and shipping capacity restrictions.”
Trump Stocks To Buy
With these ideas in mind, here are six potential stocks to buy as a result of these three Trump promises:
As always, these are meant to be ideas to consider for your portfolio and may not be suitable for all portfolios. I’ll leave that decision up to you.
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