Trump may be lagging in the polls, but that does not automatically count him out…
Incumbents are notoriously hard to beat. And as the election is decided by the electoral college, Trump could still pull out a victory without a majority of the voters supporting him.
That is what happened in 2016. So, if he wins, you will want to have your wish list ready.
There are three stock themes that will work during a Trump presidency: guns, gold and energy.
These three sectors should explode. Let me explain why.
Stocks to Buy if Trump Wins
Guns
You can expect civil unrest to ramp up, as those opposed to Trump and those who are for him will clash more frequently. Those clashes will result in the general population fearing for their safety, despite any empirical data.
Smith & Wesson Brands (Nasdaq: SWBI) is our top pick in this sector. Firearms, accessories and ammunition sales are all moving higher. And that trend will continue during a second Trump administration and possibly even a Biden administration – although expectations are for increased firearms regulations.
For those of you in the “Biden will repeal the Second Amendment” camp, be sure you read up on how difficult (almost impossible) it is to repeal a constitutional amendment regardless of how easy pundits make it sound!
Gold
Deficit spending has soared under Trump, more than in most previous administrations. In fact, the national debt now exceeds our annual GDP for the first time since World War II. There is no reason to believe that this trend will reverse.
The president is not shy about sharing his love for debt, and Congress is not exactly made up of fiscal hawks. The U.S. dollar will suffer, albeit not as quickly as many think.
The entire world is printing money right along with the U.S. But each new dollar printed means the last dollar printed is worth just a little bit less – it’s all about supply.
The best way to counter this trend is with an asset that moves higher when the dollar moves lower, and that asset is gold. Look to gold stocks like Kirkland Lake Gold (NYSE: KL) for exposure to gold from a company that has strong management and even stronger growth prospects.
Energy
This is the lowest-hanging fruit if the current administration stays in power. It will further push the fossil fuel agenda by reducing emission standards and promoting energy self-sufficiency.
That bodes well for the energy sector, which has been decimated by global oversupply and dwindling demand because of COVID-19. This sector is harder to play, so you must stick to an ETF like the Energy Select SectorSPDR Fund (NYSE: XLE).
Action Plan: So there you have it… stocks to buy if Trump wins the election.
If you’d like more investing tips and tricks, consider signing up for or free e-letter, Trade of the Day. It’s packed with useful trading insight.
About Karim Rahemtulla
Karim began his trading career early… very early. While attending boarding school in England, he recognized the value of the homemade snacks his mom sent him every semester and sold them for a profit to his fellow classmates, who were trying to avoid the horrendous British food they were served.
He then graduated to stocks and options, becoming one of the youngest chief financial officers of a brokerage and trading firm that cleared through Bear Stearns in the late 1980s. There, he learned trading skills from veterans of the business. They had already made their mistakes, and he recognized the value of the strategies they were using late in their careers.
As co-founder and chief options strategist for the groundbreaking publication Wall Street Daily, Karim turned to long-term equity anticipation securities (LEAPS) and put-selling strategies to help members capture gains. After that, he honed his strategies for readers of Automatic Trading Millionaire, where he didn’t record a single realized loss on 37 recommendations over an 18-month period.
While even he admits that record is not the norm, it showcases the effectiveness of a sound trading strategy.
His focus is on “smart” trading. Using volatility and proprietary probability modeling as his guideposts, he makes investments where risk and reward are defined ahead of time.
Today, Karim is all about lowering risk while enhancing returns using strategies such as LEAPS trading, spread trading, put selling and, of course, small cap investing. His background as the head of The Supper Club gives him unique insight into low-market-cap companies, and he brings that experience into the daily chats of The War Room.
Karim has more than 30 years of experience in options trading and international markets, and he is the author of the bestselling book Where in the World Should I Invest?
