Starting in January, Donald Trump will in fact be the new president of the United States. There are many unknowns to know and one of them is about what will happen to equities during his tenure, at least four years in front of one of the world's great economic powers. There is no magic wand to guess this scenario. But yes as for spot some clues about what may be the most positive values during the Trump era.
For the moment, the reception given by the financial markets has been positive, both on one side and the other of the Atlantic. Specific, the American stock market has appreciated by around 2% the days following the voting. Contrary to what some financial analysts presaged. Alluding to the fact that there would be big crashes in equities. In the end, it has not been like that, and it may even continue to remain under the upward trend that its main stock indexes show so far.
You can not make protections on the bag and less with this variable. But in any case, what you will be able to know are the sectors that may be more sensitive to doing better in the markets than the rest. It may be any clue you have about how you should formalize the investment in the stock market from now on. So that in this way, you develop a correct investment strategy to monetize savings the best possible way.
Trump: receiving the bag
One thing you should know is that the first year a president is elected in the United States is historically very erratic and complicated. Not surprisingly, the financial markets are waiting for their appointments and their first economic measures. From this perspective, you should not expect big revaluations, like those generated in previous exercises. Certainly there will not be.
What can happen is that the upward inertia of the American stock market continues. That is to say that it continues to be appreciated. But be very careful, since after having exceeded its all-time highs It will not be anything abnormal if there is a strong correction in their prices. The danger is that it would lead to a change in trend. Going from bullish to bearish. In which case, your investment prospects will be very negative. You will have no choice but to stay away from the equity markets, perhaps for a long time.
In any case, we will have to wait for Trump's first measures to see what the final reaction of the stock market is. It is a highly variable scenario where anything can happen. You must be aware of everything that happens so that you do not get caught out of the game. From this scenario, it is more preferable that you opt for other equity markets before the American. With no other objective than to preserve your savings.
Right now the American market does not play with stability based on this very specific and political variable. The fluctuations in their prices can be a common denominator in their evolution in the stock market from now on. Therefore, you should be more careful if you are going to open positions in some of their stocks. In order to preserve your savings with greater guarantees of success.
Values with favorable prospects
The coming to power of the controversial Republican politician will generate higher expectations of growth at certain values of equities. You will have to detect them so that you can profit from their actions in the financial markets. It can be constituted in a opportunity you know how to choose the most appropriate investment models for this period. It is one of the positive elements that you can obtain from this appointment.
One of the sectors that can capture this trend is the one that is most closely linked to defense spending in general. Its potential for appreciation may be much more interesting than the other stock market proposals. There will only be a small inconvenience and that you will have to go to the equities of the United States if you want to have a wide range of companies with these characteristics. Through somewhat more expansive commissions than those applied to European markets.
Another business segment that can do better than the rest from now on are the pharmaceutical. The reason is that you can count on significant tax incentives that are in the new president's program. In which case, it would not be surprising - if it were to be fulfilled - that they undertake important upward movements to greet these savings that the companies linked to this line of business will have.
Steelmakers can surprise
But if there is a sector that benefited from the arrival of Donald Trump, that is none other than that of the companies linked to steel. It is a clear purchase bet at this time. In fact, some of them are already beginning to rise with special force in all financial markets. The possibility that they will impose restrictions on Chinese imports is the trigger for this joy on the part of the steelmakers.
In this case, you will have a very easy proposal to complete from the national equity markets. It will be through the purchase of shares of Arcelor which is listed in the Spanish benchmark index, the Ibex 35. And which is currently highly undervalued, with strong discounts in its price quotation. To the point that it could go to levels close to 10 euros per share.
In addition, it is a series of cyclical values that have their best expression in times of global economic growth. Doing much better than the rest of its competitors. In any case, it can be one of the fixed proposals to develop your investment portfolio for the medium term. Some steel companies even distribute a small dividend to their shareholders. Although not excessively high margins, and in any case below the 5% offered by insurers, electricity companies or telecommunications companies.
Investment in infrastructure
Another novelty that Trump's policy will house, according to his electoral program, is that a very strong investment in all kinds of infrastructures will be developed during his term. As it could not be less, the construction companies will once again be another of the beneficiaries of this impulse to reactivate the economy even more. Not surprisingly, this increase in business volume will have its first reflection in the prices of these important companies in any country.
Also in this scenario, Spanish construction companies (ACS, OHL, Ferrovial or FCC) could have something to say in this class of civil works. To the point that it could be a new trigger for them to raise their price in the coming months. It will not be a bad investment strategy to position yourself in any of these stock market proposals to obtain some euros for your operations on the stock market. Well from national or other international markets.
One of the advantages of this strategy is that you have many business models to choose from. This will favor your decision in one of the segments that will be driven from public spending on the other side of the Atlantic. Not surprisingly, construction companies can do much better than the other sectors of business life in the United States. You should also take it into account to develop your portfolio from next year.
Perhaps also the banking sector
Although it may surprise many small and medium investors, including yourself, the bank can come out very well in this presidential election. In this case, the motivations would have to go looking for President Trump to be less interventionist in terms of regulation. This is highlighted by a report by Credit Suisse. Proof of them is that the financial institutions have been the ones that have been most appreciated when the results of the election are known. In some very specific cases, reaching an accounting appreciation in the heat of their prices close to 5%.
A similar process is the one that biotechnology companies can develop. With the additional incentive that they can rise in the financial markets more than other more traditional lines of business. And that they are more exposed to the actions of the most aggressive investors. Even if they have speculation as a strategy in their operations. Through short and very fast movements with those who can achieve a higher profitability in the purchase of their shares,
Beyond these sectors, it is more difficult to look for alternatives in the stock market to take advantage of the Donald Trump effect. In any case, it requires a series of actions with greater risk and that will require a greater temper from its follow-up. Although the reward you can get may be worth it if you choose these special companies.
It would not be surprising if they show higher volatility than usual over the next few days. Without setting a definite trend until the many doubts offered by the economic program of the new president of the United States are cleared up. Maybe even their quotes may mislead you at some point. Therefore, your purchase operations must be formalized under very limited monetary contributions. Or perhaps as a complement to other more powerful investments in terms of the capital allocated.
With all these variables you will have to live from now on. At least if you're going to go to the Wall Street stock market. As a consequence of them, your decision should be much more thoughtful. But where new business opportunities will always appear on the stock market.