# What stocks stand to do well with Trump in power?



## My Own Advisor (Sep 24, 2012)

What stocks stand to do well with Trump in power?

Anyone changing their investment tune of late?

REITs are diving. Utility stocks are coming down as well. Does anyone look at either sector as a buying opportunity yet?


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## hboy54 (Sep 16, 2016)

I sold at what I thought we pretty high prices T, TRP, and BCE in the last year or two. The latter 2 are up substantially since. I have very large positions in other areas, and I intend to get back my utilities some day, but some day needs a better valuation. As I have been selling down my winners, I mostly went with financials and a micro cap I own, companies with PE of 12, not 18 to 20. Further reductions have a good chance of going to debt pay down, though I am still under weight financials.


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## mordko (Jan 23, 2016)

I am in the process of re-balancing and right now about half of my North American investment is in VBR (US small value). The ETF is overweight in financials and has very little technology; obviously nothing large like Apple or Amazon. 

VBR went up by ~2% every single day since the election. 

Obviously investors are throwing themselves at the financial sector. They believe that Trump will be much lighter on regulating the Wall Street than Clinton would have been. Also, these companies are comparatively small, so their business model does not depend on trade as much as that of American giants. 

There is one legacy stock which I hold - TD bank. I kept it because it has a huge investment in the US; it was a tax-efficient way to buy into the American market. Up to the point of the election TD bank under-performed XIC Year to date. Since then TD outperformed XIC by a large margin, albeit it may have been partially due to another acquisition. 

As for the future... It's even less predictable than it used to be. In some ways economics of the incoming president's economic policy resembles Obama's in 2008 (huge stimulus, buy American clauses, tariffs on Chinese products). Obama has learnt pretty soon that Chinese can retaliate. Trump might just learn the same lesson.

In the end of the day capitalism and economics run their trends regardless of whichever way a particular populist is screwing with it. Long term trends may get a short term hiccup but will likely continue.


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## james4beach (Nov 15, 2012)

I am not changing any of my strategies. The only thing I would be mindful of is the possibility that Trump puts pressure on the Federal Reserve to stop invoking stimulus / QE. (We don't know what Trump will do).

If Fed stimulus (QE) stops, I expect stocks will go down, or remain much weaker.


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## leeder (Jan 28, 2012)

I have sold some of my positions in recent days after a few of the stocks that I held shot up to a point where I felt comfortable selling as part of my portfolio rebalancing process. My Canadian content currently has a decent mix of stocks that won't do well if rates go up and stocks that would do well (around 40:60 ratio). In the coming days/weeks/months, I would like to initiate/add to defensive names, as the stock price comes down to something of reasonable value. 

While I do think interest rates will rise in December, I think the markets have overreacted and have unfairly punished sectors, such as utilities. I'm not much of a prognosticator (crystal ball is broken!), but I figure I could add/initiate in names that have steadily increasing and sustainable dividends. Even if the stock price goes down, at least I am collecting a nice dividend. I also feel that US financials investors may be disappointed with earnings post-interest hike. While in the long-term, margins are expected to improve with interest rate hikes. In the short-term, interest rate hikes to US banks may be more harmful than good. Deposit interest rates typically increase at the announcement of interest rate hikes; however, interest rates on existing loans (e.g., mortgage, etc.) will not increase until the loans become due. So I do think we may see US bank stock price come back to earth. In any case, just my opinion... my rationale could be dead wrong and I don't intend to defend it!


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## daddybigbucks (Jan 30, 2011)

Great question.

I thought about this quite alot. Trump is following Reagan's plan. And Reagan brought the midwest to the forefront with manufacturing jobs.

I am putting my money down on iron ore companies. They have been severely beaten down with the low price of iron ore in the last 3 years.

Considering Michigan and Ohio voted for trump, i think that is the promise given.

What better way to get Motor city back on the map , then to make steel.

I have one company in particular, that was on the verge of bankruptcy but is coming back strong. I think it is one of the oldest stocks on the NY stock exchange.
I dont want to say what the name is as ive always had bad luck naming stocks on forums.


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## My Own Advisor (Sep 24, 2012)

I also think bank stocks will come down a bit, but over time, they should perform great. Thinking JPM and WFC here. I could see their dividends increasing in 2017 as well as share prices. 

Also, I could see industrial stocks doing well state side. MMM and GE come to mind. 
https://personal.vanguard.com/us/funds/snapshot?FundId=0953&FundIntExt=INT

I wonder if this is why Buffett has recently put a big bet on airline stocks?


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## capricorn (Dec 3, 2013)

I am now more hopeful of a 10% pullback in S&P after the recent run up. it is very early days to tell which sectors are impacted. Trump's policies are all over the place for now.

Fully vested in CAD portion of RRSP in a balanced fund (TD monthly equity and Mawer balanced).
in the USD portion of RRSP, I am 50% in cash. Bought some Cemex in last few days.
waiting for pullback to allocate rest.

Trump is giving me hope for such a pullback (based on all the leaks on how the transition effort is going on).


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## Shadow (Aug 31, 2016)

Trump is a great news for WFC, JP Morgan, Allergan. These stocks saw a high after the election results were announced.


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## CPA Candidate (Dec 15, 2013)

james4beach said:


> I am not changing any of my strategies. The only thing I would be mindful of is the possibility that Trump puts pressure on the Federal Reserve to stop invoking stimulus / QE. (We don't know what Trump will do).
> 
> If Fed stimulus (QE) stops, I expect stocks will go down, or remain much weaker.


James, QE ended over two years ago, on Oct 29, 2014. 

http://www.nytimes.com/2014/10/30/business/federal-reserve-janet-yellen-qe-announcement.html?_r=0


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## CPA Candidate (Dec 15, 2013)

My Own Advisor said:


> What stocks stand to do well with Trump in power?
> 
> Anyone changing their investment tune of late?
> 
> REITs are diving. Utility stocks are coming down as well. Does anyone look at either sector as a buying opportunity yet?


Changing your strategy based on wild guesses about what is coming next is bad idea. Do not follow the herd.


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## My Own Advisor (Sep 24, 2012)

Nope. Not changing my plan at all. I just wrote about that on my site. REITs and utilities go down, I buy. Bank stocks go down, I buy. Otherwise, I DRIP all stocks and let the cash flow grow.

I was simply curious about others...some are more active than I am.


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## james4beach (Nov 15, 2012)

Yeah, I really haven't changed a thing. Same long term strategy as before, described in this post.

Currently my bond allocation is getting below my targets so I play to buy more bonds around the 10 year mark. Quite nice with the higher yields. Same with stock allocations, a bit low and I'll be buying more (no matter what happens with Trump) at year end.

Actually I'm buying more of everything. I also need to buy more gold by end of year, hopefully the price drops more.


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## new dog (Jun 21, 2016)

I would the think stocks related to infrastructure would be a good bet if Trump does what he says he is going to do.


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## Koogie (Dec 15, 2014)

My Own Advisor said:


> Nope. Not changing my plan at all. I just wrote about that on my site. REITs and utilities go down, I buy. Bank stocks go down, I buy. Otherwise, I DRIP all stocks and let the cash flow grow.
> I was simply curious about others...some are more active than I am.


I also used accumulated cash to buy more ZUT and VRE this week. Also some SRU.UN

It's tough being contrary but of all the items I own, I am generally most happy year to year with my utilities (to a lesser extent the REITS). If I am happy with them normally, why not be happy when they go on sale. Interest rate speculation is just that.


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## gibor365 (Apr 1, 2011)

similar here... bought some SRU.UN, CU, KEG.UN , US bonds VCIT and VCSH ... also a bit of IDV (1st trenche)


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## Eclectic12 (Oct 20, 2010)

daddybigbucks said:


> .. I thought about this quite alot. Trump is following Reagan's plan. And Reagan brought the midwest to the forefront with manufacturing jobs.
> I am putting my money down on iron ore companies. They have been severely beaten down with the low price of iron ore in the last 3 years.
> 
> Considering Michigan and Ohio voted for trump, i think that is the promise given.
> What better way to get Motor city back on the map , then to make steel.


Question is ... will the product be of enough quality as well as cheap enough to become popular to buy?
Or is the thinking some form of make works project?


Cheers


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## jargey3000 (Jan 25, 2011)

Eclectic12 said:


> Question is ... will the product be of enough quality as well as cheap enough to become popular to buy?
> Or is the thinking some form of make works project?
> 
> 
> Cheers


the "thinking", I think, was mainly to make hollow promises, to get elected ....old politician trick! works every time!


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## daddybigbucks (Jan 30, 2011)

Eclectic12 said:


> Question is ... will the product be of enough quality as well as cheap enough to become popular to buy?
> Or is the thinking some form of make works project?
> 
> 
> Cheers


anything american made is highest quality.
China devalues their currency to make good money while still selling cheap.
Hopefully Trump adds a tariff to make the palying field level. 

Realistically considering the weight and distance, there is no way chinese steel should be cheaper than american steel. But it is.


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## humble_pie (Jun 7, 2009)

daddybigbucks said:


> Realistically considering the weight and distance, there is no way chinese steel should be cheaper than american steel. But it is.



i'd have to refresh my knowledge but i remember reading that there's one grade of steel & then there's another grade of steel even though the specs are the same.

the cheaper steel is used for household goods manufacture, pots & pans, cars, etc. All that imported stuff.

the better grade of steel is used for surgical instruments, nuclear reactors, space labs.

.


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## daddybigbucks (Jan 30, 2011)

I'm sure there are many grades of steel. 
Then there is also stainless steel which is iron ore alloy mixed with chromium (which north american has alot of)
China actually imports alot of its iron ore pellets from Australia and Brazil. (Atlas and Vale)

So China buys iron ore from brazil and ships it to china, china processes iron ore into steel, and then ships it to north america, then rail to NY. That is cheaper than a iron ore mine in minnesota, process it in milwaukee and rail to NY.
something wrong there. :beaten:


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