Blog : Trump or Clinton: Which Stocks to Buy

by Peter Leeds on September 7th, 2016

With the Presidential race rapidly approaching, now is the time to position yourself.   Depending who will win the race for the White House, there are many of the right kinds of investments, and just as many stocks which should be avoided.

[Clinton vs. Trump - See Who Wins 3 Months Early!]

There are some industries which will benefit in either case, no matter who wins. We will discuss these first.

Of course, there are also those investments which will do better under a Trump Presidency, just like there are those stocks which will perform great with a Clinton Presidency.  We will discuss these second.

The industries and types of stocks which will perform better regardless of who wins the White House includes, but is not limited to:

Infrastructure:

Both Clinton and Trump have indicated that they will increase infrastructure spending. This means repairs to roads and bridges, and plenty of construction work all across the nation.

All those construction workers will receive a salary, which they will then spend on products/services, clothes, vehicles, and meals at restaurants. This will then trickle down to other secondary aspects of the economy, such as more jobs for waiters and manufacturers.

A long-overdue infrastructure spending bill would certainly boost the overall economy, and tighten up the gap between the top 1%, and the rest of us.  The fact that it will get rid of potholes and shaky off ramps is just a bonus.

Military:

Both Hillary Clinton and Donald Trump have spoken pretty directly and aggressively about the American military.  Specifically, they both imply that the US military will be used more liberally, to solidify our nation's position in the world.

Regardless of who wins, you can expect that spending on military technologies, engagements, and strategies will increase across the board.  Companies which produce weapons will probably find more government contracts in their near future.

Combined with infrastructure spending, this would definitely give the entire economy a boost. There will be many more people who are receiving a salary which will flow back into the economy, thus generating all the benefits thereof.

Tax Reform:

Both candidates have spoken about an overhaul of the entire US tax system, which happens to be extremely long overdue.  Unfortunately, their comments have mainly been used as a campaigning tool to attract votes. 

In reality, neither candidate will actually take the steps needed to reform and improve the tax code. Any such act represents bad politics - it will be incredibly difficult to implement, and it will become a dark cloud over any individual who attempts to implement it.

Energy Independence:

Candidates always talk about energy independence because it rallies voters, and makes for great sound bites.  This continues to occur even though we are already energy independent, at least in terms of West Texas Intermediate (W.T.I.) crude oil.  

Meanwhile, we can never be energy independent in terms of the types of oil that cannot be produced or pumped here in America - namely crude from the Middle East, or Brent which is produced in the North Sea.  The latter is easily transported to (mainly) Scandinavia, by boat (rather than pipeline).

About 2/3rds of all worldwide oil contracts are traded based in terms of Brent Crude.  That is why (besides in America) oil prices are primarily based on fuel from the North Sea (Brent), with West Texas Intermediate coming in a close second.

Meanwhile, whether you believe in peak oil or not, the world's supplies of Brent are well past their pinnacle.  All global reserves are declining [as you can see here on the official OilClock.com countdown], but the draw on North Sea supplies is especially becoming an issue.  

The demand is not being replaced or offset by new production.  New supplies are increasingly difficult to locate.  

Long story short, candidates will talk about energy independence, but there's really not that much they can do about it. Politicians have very little ability to affect globally driven prices of things like oil (and most commodities). 

This is just like gasoline prices, which are a function of bottlenecks in refining capacity, combined with supply and demand.  Most voters do not understand that gasoline prices have almost nothing to do with the choices of politicians, but they will still clap and cheer and vote when their candidate talks tough about the topic.

In general, Donald Trump will be friendlier to offshore wells, as well as significant pipeline projects (mainly those coming from Canada).  This implies that some of the oil production companies will benefit with Donald Trump as President.

However, based on an early glance at the platforms of the two candidates, even though Hillary Clinton would focus more on renewable energy sources... she may also be partially open to expanding North American production capabilities. 

Clinton versus Trump:

Now to separate the two, let's talk about the differences between them. For example, based on their platforms, Hillary Clinton will typically be better for healthcare stocks and hospitals, while Donald Trump may prove superior for domestic oil production companies.

Hillary Clinton:

Healthcare:

This includes modern technologies which are proving very helpful, that have been derailed due to the extremely religious right wing. While the rest of the world gets aggressively engaged in stem cell transplants and research, America has mainly been looking on.

Under a Hillary Clinton presidency, there will be strides made in terms of modern healthcare technologies, such as stem cell transplants and blood cord banking.  The majority of people understand that there are benefits to these cutting edge treatments mentioned above.

As well, there are massive advantages to medical cannabis, especially for children with multiple seizures every day.  These are more likely to become a widespread reality under a Hillary Clinton Presidency.

Alternative Energy (Especially Solar):

Democrats are friendlier to renewable energy sources than the Republicans. While society will be moving in that direction in any case, the early platform for Hillary Clinton is much more interested in green energy than that of Donald Trump.

Avoid Insurance and Pharmaceutical Companies:

These types of investments will perform better beneath a Donald Trump Presidency, than they will with a Hillary Clinton Presidency.  Speaking of which, let's get into what would be best if Donald Trump took office.

Trump:

Oil Producers:

This includes pipelines, offshore oil, and land-based producers.  A Donald Trump presidency could also be positive for many of the Canadian resource companies, especially for those with operations based in the Alberta Tar Sands.

There may potentially be a risk premium to oil prices if Trump was elected. This is not to disparage him, or suggest any issues globally, but rather that the world does not know him as well as they may know Clinton.

For many major players in the global political arena, Hillary represents the devil they know, versus the devil they don't.  The commodity markets, just like the stock market, hate one thing more than bad news – that is uncertainty.

Thus, at first, there may be a slight risk premium to oil prices. This would be good for the oil production companies, but could also represent a potential tax on most other types of businesses.

Small Business:

Both candidates have said some predictable things about small business. While the intention of Clinton and Trump is to rejuvenate the lifeblood of this economy (which is driven by small business), the early comments by Donald Trump appear to be very friendly to that sector of the economy, even more so than those made by Hillary Clinton.

This is not to imply that any particular candidate would be better for small business than the other. However, a big part of running a small business involves getting out from underneath unnecessary bureaucracy, and much of the focus for Donald Trump surrounds removing unnecessary regulation.

Looking forward:

Regardless of who wins the presidency, this nation:

  • Will spend more on military
  • Will spend great amounts on infrastructure
  • Will continue to move towards energy independence (and oil exports)

With Donald Trump as President, there may be some benefits to:

  • Small business
  • Oil pipelines, and American fuel exporters and refineries
  • Pharmaceutical companies (mainly because Hillary Clinton might be a negative for them)
  • Big banks

With Hillary Clinton as president, there may be some benefits to:

  • Stem cell, and cord blood banking, companies
  • Medical marijuana providers
  • Green energy stocks (especially solar)
  • Certain aspects of healthcare

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