The U.S. elections have brought some uncertainty to investors, but many professional investors believe that no matter who is in charge in Washington, the performance of some companies will remain strong. Matt Benkendorf, chief investment officer at Vontobel Quality Growth, said he thinks the election impact is often exaggerated. In his view, the key factors affecting stock prices are still the underlying health of the economy and corporate profit growth. This article will analyze several types of stocks that should be less affected by elections.
Housing and infrastructure construction will continue to boom
With more people seeking homes suitable for both living and working, together with interest rates expected to remain near zero regardless of the election outcome, the real estate market is likely to continue booming in the next few years. Home improvement retail chains like Lowe’s stand to benefit from these trends. In addition, bipartisan support exists for investing in roads, bridges and higher-tech infrastructure like power grids. Therefore, utility companies will play a vital role and receive rental income from installing 5G facilities nationwide.
Technology giants face regulatory pressure but prospects remain strong
Despite their dominance, major technology companies have faced multiple headwinds lately, including criticism of their market power. However, Microsoft seems to be facing less scrutiny than peers thanks to its relatively prudent conduct since its antitrust settlement two decades ago. And with Azure continuing rapid growth, Microsoft’s diversified business should translate to steady earnings expansion going forward.
Industrial conglomerates like 3M possess cyclicality resistance
Investors confident about a broader economic recovery may consider stocks like 3M. With products serving diverse industries from aerospace to healthcare, 3M’s wide range of businesses can offset downturns in different sectors during tough times. Yet its valuation remains inexpensive compared to the overall market.
In summary, while elections bring uncertainty, investors can focus on stocks with defensive qualities that can deliver steady growth regardless of the political landscape, including companies in housing, infrastructure, technology and diversified industrials.