Yahoo Finanza If Trump Is Elected, These Will Be the 7 Best Ways To Invest $10,000
Election years tend to bring about significant economic and societal changes, and this year’s no different. Given this, you might be wondering where you should invest your money if Donald Trump is elected for a second term this year.
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While there’s no way to say for sure what will happen after the next presidential election, experts speculate that there could be changes to certain industries. What that means is the stocks of some companies — particularly in energy, defense and infrastructure — could see positive changes. Other areas might or might not be as directly affected.
Before you invest any money, you should secure your finances as well as possible, and then do your due diligence when choosing which asset classes or vehicles to invest in. That said, here are a few things you could invest $10,000 in this year and beyond.
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Invest Based On Your Own Needs
To begin with, it’s generally not wise to invest based on who’s in office. You can, of course, take that into consideration when choosing your investments, but you may want to make any actual decisions based on the potential long-term rather than short-term outcomes.
“I would absolutely not recommend investing based on the election. Historical financial market performance over time is actually quite similar regardless of who the president is and who controls government,” said Chris Urban, CFP, RICP, founder at Discovery Wealth Planning.
“Instead, I would focus on when you expect to need/use the $10,000 and invest accordingly,” he said. “High-yield savings accounts and/or CDs might be a good place to keep it if you plan to use in within the next couple of years. Beyond that, broad-based, low-cost stock — and perhaps bond — index funds are assets to consider.”
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Build an Emergency Fund and Pay Off Debt
Before investing large sums of money in anything, make sure you’ve got the fundamentals covered. This includes having a fully funded emergency fund.
“Investing money can feel like a big deal, especially when it comes to important events like a presidential election,” said Steven Kibbel, a certified financial planner and financial advisor at Prop Firm App. “No matter what happens in the election, [b]uilding up a nice safety cushion of cash for emergencies is super important.”
Try to save up at least three to six months of living expenses in that fund. That way, you’ll be prepared in case something happens and you need the money — such as in the face of an unexpected bill or layoff at work. But even having $10,000 can go a long way toward keeping you afloat if something comes up.
“It’s also really wise to pay off any debts you have, especially high-interest ones like credit cards,” Kibbel said. “Paying interest is like flushing money down the drain!”
Explore Diversified Investment Options
Even if certain sectors perform better than others due to the next president’s policies, diversifying your investment portfolio is a great way to mitigate risk and maximize your returns.
“Once you’ve got those bases covered, you can start exploring different investment options. A simple way to get started is investing in diversified funds that include lots of different companies across different industries. These tend to perform pretty well in the long term, regardless of who the president is. It’s a safe overall approach,” said Kibbel.
These Sectors Might Perform Better
It’s possible that, if Trump’s elected president, certain industries will perform better. Michael Collins, CFA and CEO of WinCap Financial, believes that the infrastructure, energy and defense industries could prosper under a new Trump administration.
“Trump has promised to invest in infrastructure and build new roads, bridges and airports, which could benefit companies involved in engineering, construction materials and transportation,” he said. “In terms of energy, the Trump administration has favored traditional energy sources, like oil and gas, and has rolled back regulations on these industries.” This means that energy companies could also see a boost.
As far as the defense industry goes, Collins said that military spending increased when Trump was in office the first time. “If he is re-elected, defense companies could continue to see growth as they receive contracts from the government,” he said.
Some companies you could consider investing in include:
ETFs like the iShares U.S. Infrastructure ETF (IFRA)
Lockheed Martin (LMT)
ExxonMobil (XOM)
Just because these companies are in the sectors that might see profitability doesn’t guarantee that they will once the next president’s elected, so keep that in mind.
Invest Based On Your Values
Whether you have $10,000 or $100,000, diversifying and investing based on your values is the way to go.
“No matter who wins though, diversifying your investments across different sectors is always a smart call,” said Kibbel. “That way, if one area struggles, you have other areas helping balance things out. The most important things are having a long-term money strategy, not panicking about short-term swings and investing in a way that aligns with your values.”
Consider Real Estate Investment Trusts (REITs)
If you have $10,000, you could also consider investing it in REITs — provided this is of interest to you and you know what you’re doing.
“Trump’s pro-business policies and focus on deregulation could potentially boost the real estate market,” said Dennis Shirshikov, a finance and economics professor at City University of New York (CUNY). “Historically, REITs have performed well in favorable economic conditions.”
As with any investment, these come with some level of risk, so weigh your options carefully.
Invest In Tax-Advantaged Accounts
Tax-advantaged accounts, like Roth IRAs, are another area to consider investing your money, according to Shirshikov. Regardless of whether Trump gets elected, these accounts can be useful in building long-term wealth, though you will be restricted to annual contribution limits — currently $7,000 for anyone under 50.
Shirshikov did point out, however, that Trump’s tax policies have historically favored lower taxes. This could be a potential advantage to having these types of accounts, as these policies could lead to lower capital gains taxes.
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