Infrastructure and defense are the two smartest options for investors to drive gains during the Donald Trump presidency.
The Republican president elect repeatedly said during his campaign that he would make substantial improvements to both if he were elected. If he can boost funding to each without raising taxes -- another campaign promise -- companies providing products and services for infrastructure and defense could see huge benefits. On Tuesday, Trump pulled off a shocking upset, winning election over Democratic rival Hillary Clinton despite probably losing the popular vote. The vote totals won't be final for some time.
Trump said fixing America's inner cities and rebuilding highways, bridges, tunnels, airports, schools, hospitals a foundational stone of his economic policy. This potential trend could provide investors with a multi-year investment opportunity.
Construction, engineering and heavy equipment providers could see huge benefits from Trump's plan to rebuild the U.S.
Investors might want to buy S&P 500 stocks in the engineering and construction industries, including Caterpillar. Or consider Fluor, which provides equipment rental services. Its domestic construction exposure make it a compelling investment idea.
Investors should buy other construction-related stocks only in the event of a pull-back, including Martin Marietta Materials, which is up about 65% year to date, Vulcan Materials, and Manitowoc, which is up nearly 44% over the same period.
In a September speech, Trump spoke about the need for a more robust defense: 90,000 extra soldiers, an additional 42 Navy ships and 100 additional modern fighter aircrafts. Trump also mentioned augmented nuclear and missile defense systems.