Whenever there’s a change in the political party in the White House, there are ramifications for investors. However, the good news for investors is that whether there’s a Republican or Democrat in the White House — or even a third-party candidate — investors can make profitable choices.
The big agenda items of each new president are usually published even before he or she takes office, allowing investors to map out their strategy and invest accordingly. Now that the Biden administration is in office, there are lots of opportunities for investors, based on Biden’s agenda push for infrastructure, clean energy and greater stimulus. Before you put any of your hard-earned dollars into any of these investments, consult with a financial advisor to verify if your choices match your investment objectives and risk tolerance. Take a look at the list of investments you should consider.
Last updated: Feb. 22, 2021
- Stock price as of Feb. 18: $726.76
Sherwin-Williams is well-known as a paint company, but the 155-year-old company is actually the global leader in the production and sale of coatings and related products like sealers. The company is a long-term market winner, and its path in the future seems solid as well. Sherwin-Williams has benefited from stay-at-home orders during the pandemic as homeowners had more time on their hands to upgrade and maintain their houses. However, the housing boom may continue, as the Democrats are pumping additional stimulus into the economy and mortgage interest rates remain at all-time lows. Sherwin-Williams stands to benefit both from either continuing lockdowns or a stimulated and reopening economy, as homeowners may feel compelled to paint and seal their homes in the hopes of snagging a higher sales price.
- Stock price as of Feb. 18: $328.41
UnitedHealth has had a great four years under the Trump administration, essentially doubling in price. With a Democrat now in the White House, the good times for UnitedHealth are likely to continue. While the Republicans made efforts to repeal the Affordable Care Act, the legislation colloquially known as “Obamacare” seems likely not only to survive but perhaps to be expanded under the Biden administration. The bottom line is that at the very least, companies like UnitedHealth will remain involved with running the insurance exchanges under the ACA and should continue to thrive.
Summit Materials (SUM)
- Stock price as of Feb. 18: $23.00
With a Democrat in the White House and Democratic majorities in the House and Senate, infrastructure is likely to be advanced as a national priority. Infrastructure-related companies, like Summit Materials, are poised to be winners under this scenario. Summit Materials produces asphalt and ready-mix concrete in addition to aggregates and cement, and it also provides paving services. These are all core components of infrastructure projects, so any increased political emphasis in this area should translate to additional revenue for Summit. More stimulus dollars in the economy and turning the corner on the coronavirus should also lift construction and building projects.
Teladoc Health (TDOC)
- Stock price as of Feb. 18: $283.10
Healthcare is one of the top priorities of the incoming Democratic administration. Teladoc Health seems uniquely situated to benefit from this renewed emphasis on healthcare. Teladoc provides remote healthcare servicing, primarily to rural American communities. As remote medical servicing is relatively inexpensive, Teladoc will likely continue to benefit from the drive to lower healthcare costs. The effects of the coronavirus pandemic in 2020 proved the value of remote healthcare, with Teladoc reporting explosive sales. The renewed Democratic focus on healthcare, the continuing effects of coronavirus stay-at-home orders and the convenience of remote healthcare should all work in Teladoc’s favor going forward.
Invesco S&P 500 Equal Weight ETF (RSP)
- Stock price as of Feb. 18: $134.58
It may surprise many investors that the S&P 500 index they see quoted every night on the financial news isn’t an average daily return of the 500 stocks within the index. The S&P 500 index is actually market-capitalization weighted, meaning larger stocks have a disproportionate effect on the return of the index. In fact, just five stocks — Apple, Microsoft, Amazon, Tesla and Facebook — make up more than 20% of the index! This can lead to unbalanced returns.
The S&P Equal Weight ETF, on the other hand, invests a roughly equal amount into each of the stocks in the S&P 500 index. If there happens to be a big tech correction during the Biden presidency — which may happen, given the stocks’ sharp run-up and the Democrats’ aversion to big tech monopolies — the equal-weighted S&P 500 index would likely outperform the market-cap weighted version.
iShares Gold Trust (IAU)
- Stock price as of Feb. 18: $16.91
The iShares Gold Trust tracks the daily price movements in gold bullion. Although the Democrats don’t have an agenda item that points toward propping up gold prices, certain elements of their platform may drive a sustained rally in gold prices. For starters, the Democrats are pushing forward with their $1.9 billion stimulus package. This will not only flood the economy with money but could also jump-start it, both of which could trigger future inflation. Market strategists also feel that the U.S. dollar might continue to weaken against foreign currencies. Both inflation and a falling dollar support higher gold prices, which would benefit the share price of IAU.
- Stock price as of Feb. 18: $137.66
Walmart may not always be the right play with a Democrat in the White House, but under the current circumstances, it seems like a good fit for two reasons. First, the current Democrat in the White House has a primary objective of distributing coronavirus vaccines and ending — or at least, slowing — the pandemic. If the Biden administration succeeds at turning the tide, the American economy will open up and consumers who have been pent up for one year now are likely to spend more. This would clearly benefit the largest retailer in the world.
Adding fuel to the fire would be the passage and distribution of the proposed $1.9 billion stimulus package. In addition to many other aspects of the proposal, this plan would put $1,400 in the hands of most Americans, at least some of which could be expected to be spent on groceries and general consumer purchases. With any rise in American consumer spending, Walmart could be expected to benefit.
Toll Brothers (TOL)
- Stock price as of Feb. 18: $53.96
One of the few bright spots in the economy in 2020 was the housing market. Due to a variety of factors, from extra stimulus money in the economy to record-low mortgage interest rates, buyers pushed up housing prices and supply dried up. If 2021 is the year that the coronavirus pandemic recedes and additional stimulus flows into consumers’ pockets, as is the agenda of the new Democrat in the White House, demand for housing may remain high. Combined with continuing low interest rates, this is a great scenario for home builders like Toll Brothers.
- Stock price as of Feb. 18: $67.09
Sunrun seems like a direct beneficiary of the ascendancy of Joe Biden to the presidency. Biden has made it clear that clean energy is an important part of his agenda, and solar companies are among those who should benefit. Although it can be hard to separate winners from losers in this burgeoning industry, Sunrun has already been responsible for 20% of all solar rooftop installations in the U.S., making it the largest such company in the country. The company is also expanding into a number of additional areas, including home batteries and virtual power plants, in which the company sells excess stored energy back to the grid. As part of a diversified portfolio, Sunrun could be an interesting option under a Democratic White House.
Blink Charging (BLNK)
- Stock price as of Feb. 18: $44.53
One of the main platforms of the Biden administration is the expansion and development of clean energy. This makes electric vehicle stocks like Tesla obvious beneficiaries. However, Tesla skyrocketed over 700% in 2020 alone, so a smarter bet might be ancillary businesses that are needed to keep the electric vehicle companies humming. Blink Charging fits the bill, as the company dubs itself the market-leading owner, operator and provider of EV charging stations and services. As one of the major obstacles to broader EV adoption is the lack of charging stations, Blink’s services are likely to increase in demand.
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Disclaimer: These stocks were originally selected for this list on Feb. 5, 2021.
Photo Disclaimer: Please note photos are for representational purposes only.