Warren Buffet is clear:
“Stop trying to predict the direction of the stock market, the economy, or the elections.”
Making claims about who will win the 2020 election, how the market will react, and the trajectory of the economy is frivolous in most situations; however, you can make reasonable assurances of which stocks will pull ahead based on the president elect. By analyzing the platforms of each presidential candidate, you can determine which industries will be favoured through policies, tax breaks, and government initiatives. Instead of trying to predict the future, we’re looking to draw conclusions based on the evidence put in front of us.
If Donald Trump is re-elected for presidency this November, we see a few areas of the economy that could continue to experience growth and others that could take the stage off new campaign promises.
With discussions around defence, infrastructure, tax cuts, and more, there are a few players that will either remain on top of see renewed strength under 4 more years of Trump.
Read on for an introduction to our top 3 stocks for a Trump win:
Lockheed Martin (NYSE: LMT)
For the United States, defence is always a big market. As one of the largest international policing forces, this industry is both one of great contention and one of great profit. With Trump a massive proponent of strength at the country-wide level and Republicans known to allocate more money for the industry, defence could see a greater inflow of capital over the next term – especially as talks with China grow more serious.
Since election day in 2016, LMT is up over 60% and this growth could continue under a successive Trump term.
Caterpillar (NYSE: CAT)
A real estate man at heart, Trump has helped Caterpillar grow to a place of great strength, bringing them up over 50% since he first came into office (even considering COVID-related drops in the share price). With a renewed emphasis on infrastructure in order to continue building the US-Mexico border wall, as well as to bolster the economy through job creation, a second Trump term would mean CAT benefits massively throughout the next four years.
Regardless of the outcome of the election, though, Caterpillar is positioned to benefit from the platforms of both the candidates. Both Trump and Biden have expressed interest in construction projects throughout the nation; however, a Trump victory would likely create an even more favourable environment for Caterpillar.
Amazon (NASDAQ: AMZN)
Though Trump and Bezos are notoriously critical of one another over social and written media, a second Trump term could actually mean better policy for Amazon over the next four years. With labour concerns a huge (and rising) concern at Amazon, Biden’s proposed raise to minimum wage would cut into Amazon’s profit margin by a large percentage, crippling the giant. Additionally, a Democratic administration would likely support unionization efforts to a greater extent.
With Trump’s comparably relaxed stance on labour issues and greater emphasis on fostering positive conditions for big business, Amazon would have less threats to their business model and allow them to continue their exponential growth with ease.