In this moment between Donald Trump’s election victory and his inauguration as president it is difficult to make any investment decisions. Last week, analysts were praising Trump’s selection of Scott Bessent as Treasury secretary, saying the former hedge fund manager could bring some orthodoxy to the incoming administration. A few days later, however, Trump said he would put 25 per cent tariffs on Mexico and Canada until they stopped “all illegal aliens”. The truth is that no one will knows what will happen until he takes office, and even then policy decisions could change from week to week.
- Improving return on equity
- Tariffs could encourage nearshoring of supply chains
- Backlog after hurricane destruction
- Huge pricing power
- High valuation
- Potential antitrust threat
In this political environment it is sensible for investors to pick companies that could benefit from Trump’s most extreme policies, but are set to keep growing profits regardless.