Loading the Elevenlabs Text to Speech AudioNative Player...
3 Reasons I Think Trump Would Be Better for My Portfolio
With the election just around the corner, many people are uncertain who is worth voting for. Who would be better for the economy? For social policies? For your investment portfolio? These are all fair questions, and they mean different things to different people.
Read More: Financial Expert: 4 Economic Predictions for the Day After the Election If Kamala Harris Wins
Find Out: 9 Things You Must Do To Grow Your Wealth in 2024
Of course, one of the biggest concerns for voters is the economy, which can impact not only how well businesses do and how well cities and states perform, but also how your portfolio looks. It’s not selfish to want to grow your wealth and consider which candidate might better impact your portfolio–that’s just looking out for yourself.
For many voters, Trump is a clear winner on the economy because inflation was quite low during his presidency. Furthermore, Donald Trump had the best Dow Jones Industrial Average return of any Republican president since Calvin Coolidge. So far, Trump has overseen a healthier stock market than Joe Biden during Biden’s almost four-year term.
This matters to people whose money is tied up in stocks and bonds, especially because Kamala Harris, Trump’s opponent, is Biden’s vice president. Harris has said she would not change anything Biden has done, so we can expect more of the same.
For those who want to return to Trump’s policies, the stock market is one area that would make sense.
One financial advisor has outlined why he believes Trump’s policies are beneficial for those with investments. Idan Ohayon, a U.S.-based certified financial advisor at Insuranks, is a seasoned chartered financial analyst with over a decade of experience monitoring the financial sector.
Here are the three reasons he thinks Trump’s policies could benefit your stock portfolio.
Discover Next: 3 Challenges You Could Face If Trump Is Elected and You Plan To Retire in the Next 4 Years
Trending Now:
If Donald Trump is known for anything, it is his support of tax cuts. The Tax Cuts and Jobs Act of 2017 was Trump’s major overhaul of the tax code, creating a single flat corporate tax rate of 21%. Before the act, the highest corporate tax rate was 35%, resulting in significant savings at the corporate level that are likely reflected in how those companies perform on the stock market.
While corporate tax rates will not expire in 2025, along with other cuts he made, Trump has proposed further reductions, down to 15%. Harris, in contrast, would raise the corporate tax rate to 28%.
Story Continues
As for income tax, while Harris has little interest in raising income tax rates for those making less than $400,000, Trump’s tax cuts also benefit capital gains taxes. As Ohayon said, “With lower capital gains rates, you get to keep more profit from selling appreciated stocks, allowing you to reinvest those gains more efficiently.”
Thus, not only would corporations likely sell at higher share values on the market under Trump due to corporate tax cuts, but traders would also benefit from more lenient capital gains rates.
To enhance these benefits, Trump has favored deregulation. A longstanding Republican argument has been that regulation stifles businesses, making them less innovative.
This effect extends to financial institutions, as seen with cryptocurrency, a deregulated financial instrument that has continued to hold value in the market.
“Trump’s pro-crypto-business approach and stance on Bitcoin, which has proven to be a lucrative investment option in recent years, could also benefit your stock portfolio. With a positive outlook on cryptocurrency and blockchain technology, we may see a surge in the tech sector, leading to potential opportunities for investors,” added Max Avery, a trading portfolio management expert and founder of Syndicately.
Ohayon agrees, noting that deregulation “allows financial institutions to innovate faster. Less regulatory red tape means banks and fintech companies can roll out new financial products, offering traders more sophisticated tools and increased market liquidity–both of which could amplify your portfolio’s growth potential.”
Deregulation in the financial sector has historically led to financial growth, especially for traders and those with existing wealth. If you’ve got capital to invest, Trump’s deregulation might help you grow it.
Trump is also well known for easing regulations on construction and development. As restrictions lift, construction companies, developers, and contractors face less red tape and fewer permits when it comes to housing and real estate development.
This shift toward more housing and faster building can be highly beneficial to the sector and its investors.
“Trump’s policies can provide an unexpected lift to the real estate sector, particularly through deregulation in construction and development. Real estate stocks, [Real Estate Investment Trusts] REITs, and related sectors could see significant benefits through reduced building restrictions and favorable tax treatment,” stated Ohayon.
Trump’s stance on deregulation has been notable and for those seeking rapid growth and profits, that can be a significant advantage.
In the end, this race is a close one, and whether Trump or Harris will win will be a matter of public record soon. As for who will be better for your portfolio, it ultimately depends on perspective. From this financial advisor’s standpoint, deregulation and tax cuts favor traders, which could be good news for investors.
Only time will tell.
Editor’s note on election 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.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: 3 Reasons I Think Trump Would Be Better for My Portfolio
Keep Up to Date with the Most Important News
