Yahoo Finance The Best $5,000 You Can Invest If Trump Wins the Election
If you believe Donald Trump will win the White House come November and you have $5,000 available, how should you invest for the greatest potential gains?
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Forget the election politics for a moment and put on your investing strategist hat. Investment experts consider the following options poised for big wins if Trump takes the presidency.
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Banks and Lenders
“If Trump were to win the election, one sector that could potentially perform well is the financial sector,” said Justin Haywood, CFP and founder of Haywood Wealth Management. “Trump’s first term in office focused on deregulating the financial industry to promote growth. If similar policies were reinstated, financial institutions could benefit from reduced regulatory burdens, leading to increased profitability.
“Lower compliance costs and greater flexibility in operations can improve margins for banks and financial services companies. Also, deregulation can create a more favorable lending environment, increasing loan volumes and interest income for banks.”
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Private Equity Real Estate
Many middle-class investors aren’t familiar with real estate syndications. But they’ve been a favorite of the wealthy for decades, as a hands-off way to invest in real estate for all the benefits of ownership with none of the headaches of landlording.
Real estate syndications stand to win in several ways. First, a victorious Trump would push to renew the signature legislation from his first term: The Tax Cuts & Jobs Act of 2017. One key component for real estate investors included bonus depreciation, which has started sunsetting and reducing the tax benefits for private equity real estate investors.
Second, Joe Biden’s push for nationwide rent stabilization would be avoided. And then there are interest rates — which Trump wouldn’t control directly but would certainly lobby to lower.
“As president, Trump will push for lower interest rates,” said Sidney and Saundra Curry, certified financial instructors and the founders of BC Holdings of Tennessee. “Companies and industries that will benefit from lower interest rates include real estate and finance, among others. As interest rates drop, the cost of money will decrease resulting in increased property purchases.
“If you are interested in real estate, explore diversified real estate investment options to minimize your exposure to any one market, property or sponsor.”
Look at passive real estate investment clubs to invest smaller amounts across many real estate syndications.
Oil and Gas Exploration
Anthony Termini, a seasoned investment advisor and expert contributor for Annuity.org, recommends companies poised to gain from new drilling sites.
“In May 2024, Donald Trump told a group of oil industry executives that he would expand drilling in the Gulf of Mexico and that he would reverse the restrictions on drilling in the Alaskan Arctic,” Termini said. “These will be major boons to the oil and gas industry and support an investment thesis focused on drilling. Don’t forget the quote, ‘Drill, baby drill.’
Termini suggested using an ETF such as Invesco Energy Exploration & Production ETF (PXE). He also suggested Occidental Petroleum (OXY), saying, “OXY is one of the largest drillers currently operating in the Gulf and likely to be a major beneficiary of expanded leases there. The fact that Warren Buffett’s Berkshire Hathaway owns a large chunk of the OXY puts you in good company.”
Termini isn’t alone in seeing a huge opportunity in oil and gas exploration under a second Trump presidency. Day trading educator Diego Apaza, founder of Alpha Stocks Lab, also sees huge potential in energy.
“ExxonMobil and Chevron would be great places to invest because Trump’s initiatives frequently focus on deregulation and backing of the oil and gas industries,” Apaza said. “Buying into energy shares, especially oil and gas organizations, could gain from future regulation changes.”
Defense and Aerospace
Apaza also foresees a defense spending boom under Trump.
“Defense consumption increased as a priority with Trump in office,” he said. “Northrop Grumman would be an ideal place to invest to capitalize on a second Trump push in defense spending.
“Another American company poised to gain is Lockheed Martin, as he will most likely push to reinforce the strength of the American military.”
American Manufacturers With Domestic Consumers
The Currys also note Trump’s tendency toward tariffs — and the winners and losers from them.
“If Trump wins, look for a push to increase tariffs for imported goods coming into the U.S.,” the Currys said. “This will increase the price of goods from foreign countries with the goal of making the prices of American made goods more attractive to consumers.
“Industries such as automotive, electronics, and apparel could see a shift to buying more American goods. This could cause a supply and demand issue in the U.S., which could result in higher inflation however.”
Other countries may well retaliate, however. That puts American manufacturers with strong foreign markets at risk, but companies that mostly sell to American consumers stand to gain from protectionist policies such as import tariffs.
Bonds in Transition
No one has a crystal ball. But if you foresee a surge in uncertainty in November, consider retreating to bonds temporarily. They are a safe place to put your $5,000.
“In times of transition and uncertainty, many investors run for bonds to allow their money to rest in a safer and more predictable investment vehicle until the dust settles,” the Currys said. “Some investors like to see if the policies will be enacted before taking the plunge.
“If you are unsure, stay in bonds until you feel more comfortable.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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