Trump will return to the White House this January, and some investors are already preparing for that scenario. Throughout the campaign, Trump has hinted at which industries can benefit the most from his policies.
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Money expert Jaspreet Singh has since highlighted those industries on his Minority Mindset YouTube channel. Singh also reviewed historical election data and long-term stock trends to help investors construct a plan heading into 2025.
How Presidents Impact the Stock Market
The stock market has endured ups and downs for Democrat and Republican presidents, but stocks almost always rise the year after an election. Singh combed through data from 1944-2020, and out of every post-election year, only 2001 yielded losses for investors — 9/11 and the Dotcom Bubble burst headlined that year.
Past performances don’t guarantee future outcomes, but history is on any president’s side the year that they get sworn into the White House. However, presidents also impact the stock market with their policies.
Policies and campaign promises dictate government spending, which makes up 22% to 29% of GDP. Singh mentioned to his viewers that Trump’s campaign promises suggested heightened investments in oil companies, financial services companies, the military and space exploration. Stocks involved in those verticals may generate outsized gains during Trump’s second term.
The Minority Mindset YouTuber also mentioned that Trump’s promise to deport illegal immigrants can be good for private prison stocks.
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Investors Still Need To Master the Fundamentals
While the election can excite investors and make them chase trending stocks and opportunities, Singh emphasized the need for an investing strategy. Creating a strategy will help you determine which stocks and funds align with your long-term goals. You’ll also be more likely to stay the course instead of letting emotions decide your buy and sell orders.
For instance, Singh said it’s fine to sell a stock if your strategy changes or the company posts bad financials that change the investment thesis. However, it’s not good to sell stocks just because of headlines. He mentioned that many big media outlets have to cater to excessive greed or fear to get the most engagement. Those headlines can stir up emotions and cause investors to deviate from their strategies.
The stock market has continued to rally higher under Republicans and Democrats. Stocks have entered corrections and endured dramatic crashes, and yet they have rallied higher each time. Singh implored his viewers to keep this historical context in mind while sticking with their investment strategies.
Long-term investors do not invest for election cycles. The best investors have stayed put under Republican and Democrat presidents. They stick with their strategies and review new information to see if they have to adjust their portfolios.
Avoid Stock Trading
Singh favors long-term investing and cautioned viewers about making trades. Trading stocks and options can feel fun and exciting, but that’s the problem — investing isn’t supposed to be fun and exciting. It’s supposed to be calculated and take time to see meaningful results.
The Minority Mindset YouTuber compared stock trading with gambling. Stock trading can also create the illusion of intelligence that makes it feel like a sophisticated money-maker instead of a gamble. Stock trading gets even more dangerous if you throw margin into the mix. It’s possible to wipe out your entire portfolio with that combination.
While you can pick individual stocks that you hold for the long run, investors can also invest in an index fund that tracks the S&P 500. Singh views this index fund as akin to investing in the U.S. economy. You’re statistically unlikely to make a profit from stock trading, and you could put all of that time into a side hustle and developing career skills instead.
Avoiding stock trading and sticking with long-term investments can save you time while growing your wealth faster.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: How To Accelerate Your Wealth Through a Trump Presidency, According to Jaspreet Singh
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
