Why You Should Already Know Where to Invest in 2017

2017 is shaping up to be the most exciting year of the century. We’re only two months in and so much has happened already. Most of the attention is focused on Donald Trump’s every action…and Tweet.

So far, US markets haven’t spiralled down, even with Donald as President.

The Dow and the S&P 500 are up 1.48% and 2.49% year-to-date. Could it be that Trump is exactly what investors and America needs?

Not according to the Australian Financial Review.

Trump has a track record of acting irrationally and in complete disagreement with accepted liberal economic orthodoxy.

‘Investors looking for guidance on how to position their portfolios might want to be careful. As Prime Minister Malcolm Turnbull has discovered, nothing is certain until Trump actually does something.

‘Markets have rallied on the rational expectation that the irrational and unpredictable Trump would be counselled and cajoled into rational action by his team of advisers, many of whom have the respect of Wall Street.

That’s typical mainstream ‘thinking’ for you.

I would argue that Trump isn’t acting irrationally at all. Whether you like his proposed policies or not, Trump is doing what he said he would.

It’s what every politician should aspire to do, don’t you agree?

Trump’s decisions are exactly what we should expect. Trump himself outlined many changes he wanted to make. So why try and guess what he’ll do next? Instead, just pay attention to Trump’s script…and his Tweets.

Delivering on promises

Trump officially assumed office a little over two weeks ago. What has he done so far?

He made a series of policy changes that blocked refugee admission for months. He increased detention and deportation of unauthorised immigrants.

As you probably know, a federal court judge lifted the travel ban. That prompted Trump to respond to ‘this so-called judge,’ on Twitter, saying his ruling was ‘ridiculous and will be overturned!

Trump has also blocked federal funding to organisations that provide abortion.

Already, these are two pretty controversial topics. But it’s these types of changes that put Trump in office. Can you blame him for doing what he said he’d do?

Other campaign topics included the US-Mexican border wall, dismantling Obamacare, and abandoning the Trans-Pacific Partnership (TPP).

And guess what? He’s dealing with those topics too.

He withdrew from negotiations over a proposed TPP trade deal. It effectively put the nail in the TPP coffin. Trump exempted agencies from Obamacare fees and regulation. And he’s directed the Department of Homeland Security to begin construction on a US-Mexican wall.

It’s almost like he’s steamrolling through his campaign promises.

Trump isn’t an irrational man whose unpredictability is bad for investors. He’s given investors an outline of everything he’d like to get done in office.

It’s almost like having the answers to a test.

Stop guessing and look for a related investment

What does Trump still want to achieve while in office?

On 21 November, Trump posted a video outlining his first 100 days in office.

My agenda will be based on a simple core principle, putting America first. Whether it’s producing steel, building cars or curing disease, I want the next generation of production and innovation to happen right here on our great home land, America.

Cyber security was another key topic Trump planned to tackle in the first 100 days.

On national security, I will ask the Department of Defense and the chairman of the joint chiefs of staff to develop a comprehensive plan to protect America’s vital infrastructure from cyber-attacks and all other forms of attacks.

Cyber security is already a huge and growing market.  It’s become a necessity for almost every business. According to Cybersecurity Ventures, cyber security costs will total US$1 trillion globally from 2017–21.

The US government has increased their annual cyber security budget by 35%. Obama’s 2017 budget proposal allotted US$19 billion for cyber security.

Under Trump that figure might increase further. And it could be great news for companies like Covata Ltd [ASX:CVT] and Prophecy International Holdings [ASX:PRO].

Both are listed on the ASX and operate internationally. Covata provides services to various government agencies around the world. PRO works closely with various US universities and institutions.

And if Donald focuses on spending more on cyber protection, it presents potential opportunities to both companies.

Another possible investment created by ‘predictable Trump’ is infrastructure.

Trump has an affinity for infrastructure.  According to donaldjtrump.com, He plans to ‘refocus government spending on American infrastructure.’ And he plans to pump $1 trillion into the sector.

Reported by Fortune:

He [Trump] talked about it all the time on the campaign trail, promising a $1 trillion investing blitz. And again mere hours after declaring victory: “We’re going to rebuild our infrastructure, which will become, by the way, second to none.”

With a trillion dollars funnelled into US infrastructure, it provides opportunities for companies like Eden Innovations [ASX:EDE] and Macquarie Atlas Roads Ltd [ASX:MQA].

Both companies are listed on the ASX. And both stand to profit from ramping up US infrastructure.

Eden is all about making concrete stronger and longer lasting. They achieve this through their admixture, EdenCrete. The end goal for Eden is to become a standard admixture in the US infrastructure market.

MQA’s business is slightly different. They develop and operate toll roads. One of their assets resides in northern Virginia, US.

A trillion bucks pumped into US infrastructure could potentially mean more contracts for Eden, MQA, and other companies whose products and technical skills will come into greater demand.

So the next time you’re hit over the head with another mainstream article declaring the ‘erratic and unpredictable’ policies of Donald Trump, stop reading. They obviously didn’t listen to Trump during his campaign, and they aren’t listening now.

Trump is focused on what got him voted in to office — at least for now. Ignore his proclamations at your own peril.


Härje Ronngard,
Contributing Editor, Money Morning

PS: I’ll say it again, 2017 will be the most exciting year yet. Not just because things are changing. This year will be full of opportunities in the Aussie small-cap space.

President Trump is good news for a lot of Aussie small-caps. It’s why stocks like Eden jumped when Donald officially claimed victory. So start profiting from Trump instead of protesting.

Small-cap specialist, Sam Volkering has stocks which could potentially skyrocket under President Trump. And he’s no stranger to explosive stocks.

In his advisory service, Australian Small-Cap Investigator, Sam has six active investments returning triple digit figures. He even recommended one stock to his readers that’s up more than 1,000%!

To find out more, click here.

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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