Stock recommendations for investors if Donald Trump becomes US president

By @vitthernandez on
Donald Trump
U.S. Republican presidential candidate Donald Trump speaks during a campaign stop in Tampa, Florida February 12, 2016. Reuters/Mike Carlson/File Photo

When former Davao City Mayor Rodrigo Duterte was campaigning in early 2016, he was dubbed Donald Trump of the East, causing the markets to be jittery. However, after 39 percent of the Filipino voters elected him, the peso and stocks rose. Would Trump have the same effect on American shareprices?

Fortune polled stock markets on a possible Trump presidency and came up with a list of stock recommendations for investors. The share are in the defence, infrastructure and restaurants sectors.

Interestingly, it is not a bourse advise that US Supreme Court Justice Ruth Bader Ginsburg. She instead shared a joke she had with her late husband, Marty, which is to buy a one-way ticket to New Zealand if Trump would replace Barack Obama as US president.

Because the Republican Party, to which Trump belongs, has military strength for its mantra, Fortune listed defence stocks because Trump, if elected president, could possibly be more aggressive. Eurasia Group President Ian Bremmer foresees Trump going after terrorists from the air which is why Fortune recommends to buy shares of Lockheed Martin (LMT), Raytheon (RTN), Boeing BA) and Northrop Grumman (NOC).

Infrastructure follows defence because Trump identified during a December debate about the US benefitting from spending billions to fix the country’s airports, bridges and roads. Include as well 50-foot walls to separate the US from Mexico. Because Trump has more experience building than any president in American history, Lynx Investment Advisory Chairman Peter Tanous recommends Jacobs Engineering (JEC), Fluor (FLR) and Caterpillar (CAT).

But for investment strategist Jason Pride, investors should also look at smaller companies whose small cap stocks could outperform larger companies. He suggests Vanguard’s Russell 2000 ETF to track 2,000 SMEs.

Finally, Trump has his eyes on deporting illegal labour which could drive up wages and costs in the restaurant business. Then Fortune’s advice is to invest in primarily domestic chains which are less price-sensitive if dining establishments have to pay more wages for American workers. Its list has Del Frisco’s Restaurant (DFRG) and Ruth’s Hospitality (RUTH), owner of Ruth’s Chris Steak House.

Ruth Bader Ginsburg Associate Justice Ruth Bader Ginsburg speaks during the lunch session of "The Women's Conference 2010" in Long Beach, California October 26, 2010.  Reuters/Mario Anzuoni

But for the other Ruth, that is the one at the Supreme Court, while she does not want to think about possibilities of a Trump victory in the polls, concedes, “but if it should be, then everything is up for grabs.” It likely would be America’s Brexit moment.

VIDEO: Supreme Court Justice Ruth Bader Ginsburg is moving to New Zealand 

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