Donald Trump vs. Hillary Clinton: 5 Ways to Invest Your Money (Depending on Who Wins)
An expert investor reveals the industries and businesses that will pop depending on who becomes the next president.
With the election in full swing, voters need to start thinking about how the next president will impact their investment positions. (Have you Trumped your portfolio? Hillary-ed your 401(k)?) Only Donald Trump can be expected to introduce significant changes. Hillary Clinton essentially is a continuation of the Obama administration, with some pet causes thrown in. Given these parameters, it's probably wiser to invest in themes.
The writing is on the wall: Less U.S. military presence in the Middle East and Europe, more in Asia. And drones enable the military to do more with less. In fact, drones are the one area where defense spending is rising. Elbit Systems (ESLT) is Israel's leading specialist in drones, and Northrop Grumman (NOC) is the leading maker of drones, among other things. These may be good bets no matter who wins.
THE GREEN ECONOMY
Cannabis is going to be legalized, and the big beneficiary will be Big Tobacco (soon to be Big Wacky Tobacco). It certainly is ready: As part of the 1998 master settlement with the U.S. government, Big Tobacco had to turn over documents. Among those documents were business plans for the eventuality of legal marijuana. It already is experienced at harvesting and selling a controlled substance, and, more critically, it can deliver the tax revenue. Big Tobacco also has the necessary capital. It takes vision to get in this early, but it's worthwhile. Cigarette giant Altria (MO) could be in a perfect position — and a good bet no matter who wins.
Clinton will push for clean energy, and Trump for traditional energy. So imagine Tesla (TSLA) and SunPower (SPWR) for a Clinton administration (TSLA acquired SolarCity recently), and ExxonMobil (XOM) for Trump.
INVEST IN AMERICA
Trump calls for a trade policy emphasizing America first. Clinton champions infrastructure investment. Both lead to the same place: an emphasis on U.S.-heavy industry. In addition, Trump is more likely to pressure U.S. industry toward onshore jobs. Think Nucor (NUE), Vulcan Materials (VMC) and Chicago Bridge & Industries (CBI): Construction requires steel and gravel. NUE in particular fits both Trump's Made in America approach and Clinton's infrastructure-building plans.
Clinton wants to push for more gun control. Meanwhile, Trump is running on a law-and-order platform, so think Smith & Wesson (SWHC). A Clinton presidency also would provide a short-term bump to gun sales as buyers rush out and buy arms. A Trump presidency effectively will encourage more gun ownership. A Clinton presidency will encourage alternatives to firearms such as Taser (TASR). At the same time, with Trump in charge, he'll promote self-defense.
Zatlin is president of SouthBay Research, a macroeconomic forecasting firm and publisher of MoneyballEconomics.com.
This story first appeared in the Oct. 14 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.