Forget about gaffes and scandals in this crazy presidential election between Donald Trump and Hilary Clinton: The issue bound to touch most Americans personally comes down to money. The market will respond to whoever is elected, so what does each candidate mean for investments?
Both candidates have sectors that could see tailwinds if they're elected. This is information you can use to plan portfolio and investment adjustments.
Traditionally, Republican candidates are viewed as pro-business, favoring free market, less regulation and lower taxes. Based on what we know of Trump and his platform, these sectors should see a boost if he becomes commander in chief:
- Coal and Fracking: This industry could potentially benefit the most under Trump's administration. It's likely that he will encourage more domestic production of coal, which could lead to a major cash-in for those companies.
- Oil: Trump is serious about oil; he wants the United States to become energy independent, so oil and natural gas companies could benefit at the margin. New pipeline construction and increased drilling would occur given reduced regulations, bringing more business to oil equipment manufacturers-another industry tier to watch as we approach November. We might also see the federal ban on U.S. oil exports lifted, meaning big business for American oil companies.
- Defense: Typically, you can bank on Republicans to be strong supporters of military spending. If Trump enters office next year, military contractors, weapon makers and aerospace equipment suppliers could benefit. In addition, increased tensions in the war on terror and a rise in U.S.-Mexican border patrols could give defense stocks a major boost forward.
There are sectors projected to lose, so beware of:
- Shipping and Freight: These stocks could see a loss under a Trump presidency, since his stance on higher tariffs and strict trade will put pressure on goods coming into the United States.