President Donald Trump has been shaking things up in Washington D.C., looking to make good on numerous campaign promises. The administration has now turned its efforts to a major infrastructure spending plan that could give the U.S. economy an even larger boost for years to come.
With so many key pieces of legislation already being passed or in process, investors need to consider the potential effects of fresh legislation, and how changing economic dynamics may alter the current investment landscape.
Due to the recent tax cuts, companies have been doling out bonuses on a massive scale, and some have even brought U.S. Dollars kept overseas back stateside. With the U.S. economic engine running in high gear, how can investors look to capitalize on the Trump economy?
Take Advantage of Interest Rates
In what could be another potentially big investment opportunity, the path of interest rates is likely to move higher during the Trump Presidency. His pick for Fed Chairman, Jerome Powell, likely shares in his way of thinking.
Rates have already started to move higher with the key ten-year note yield cracking the 2.75% level recently. This could very well be the beginning of a long and protracted bear market for treasuries, as rates continue to return to more historical norms.
Higher rates can be advantageous for banks, lenders and others who earn interest income. The potential for higher rates can also be taken advantage of through various ETF products. Inverse-bond ETFs are designed to profit from rising yields, and are a way to try to potentially profit from higher yields.
The Trump economy has already shown impressive growth, but it is just getting started. Current trends being seen in labor, manufacturing, regulation and capital investment could be here to stay. Now is the ideal time to take stock of your holdings, and to make any necessary adjustments needed to try to take full advantage of strong economic growth, rising interest rates and a less-burdensome regulatory environment.