Lockdowns, social distancing, vaccine hopes…
With so much of our attention focused on Covid-19, it’s easy to forget that the 2020 elections are less than six months away.
At this moment, it’s still anyone’s guess which side will win.
Trump, with his aggressive tariff policies, has certainly convinced many voters that he is a leader who can negotiate better deals for the United States.
On the other hand, however, he’s being critiqued for his response to the coronavirus pandemic. Something that’s benefiting his Democratic opponent Joe Biden.
So, since both candidates show equal promise of winning, let’s see what sectors of the market will do well no matter the outcome.
In Uncertain Times, Investors Will Flock To This Asset Class
I understand that after listening to me talk about gold for the last two years, you must be getting bored. So, I’ll keep it short.
Gold thrives in times of uncertainty… and this is the most uncertain period in the last ten years.
We’re deep in a recession, the government is running the highest deficit since the Second World War, and we’re printing money like there’s no tomorrow.
And it’s not just that, election years tend to be rife with uncertainty as it is. No one knows who’s going to win, the type of policies that will be put in place, and to top it all off, candidates will typically make outrageous statements during this time. All of which creates an ideal environment for gold to thrive.
The stocks I like from this sector are Barrick Gold (NYSE: GOLD), Newmont Corp (NYSE: NEM), and Kinross Gold (NYSE: KGC).
The Long Overdue Infrastructure Plan
And speaking of the economic crisis, an effective way to recover from one is through aggressive fiscal policies.
No matter who wins the November elections, you can expect the next president to enact one when he gets in office.
The two most common fiscal policies are tax cuts and infrastructure plans. And since taxes are already quite low due to the 2017 reforms, the most likely next move will be a nation-wide infrastructure plan.
When that happens, revenues of construction companies should see a major boost.
I’m talking of stocks like Vulcan Materials (NYSE: VMC), the largest manufacturer of construction materials in the United States, Nucor (NYSE: NUE), the nation’s largest steelmaker, and Caterpillar (NYSE: CAT), the iconic manufacturer of heavy equipment.
One Industry That’s Been Growing Rapidly Under Trump’s Presidency
Finally, there’s green energy.
Sure, you might consider that to be a bet on Biden victory, but the truth is that green energy investments made a record high last year… with Trump in office.
The thing is, policies about such projects are often decided on the state or municipal level.
And it just so happens that rural Republican districts offer some of the best potential for harnessing solar and wind power.
By investing in renewables sources, Republican leaders in those districts can bring well-paying jobs to places where employment options are otherwise scarce.
In addition, renewable projects can significantly increase tax revenues. In Nolan County, Texas, for example, the tax base increased almost eight-fold since they started building wind farms.
Green energy is just one of those industries that are going to keep gaining traction no matter what, and is why I recommend investing in it.
Stocks I like from this sector are solar equipment producers Enphase Energy (NASDAQ: ENPH) and SolarEdge Technologies (NASDAQ: SEDG), as well as Ormat Technologies (ORA), a geothermal plant manufacturer and operator.