Donald Trump shocked the world last night, defeating Hillary Clinton to become the 45th President of the United States.
Investors reacted to the news by freaking out. As it became more and more likely Trump would win, stock market futures collapsed. At one point, numbers indicated the Dow Jones Industrial Average would open more than 900 points lower.
But as investors came to grips with the news, they turned more bullish. Major indexes turned previous losses around, and even turned positive during intra-day trading on Wednesday.
There are a couple of different sectors that look poised to benefit from a Trump win.
Gold is the obvious choice. Many of Trump’s campaign promises would be negative for the U.S. Dollar if enacted, like tariffs for foreign goods. What’s bad news for fiat currency is good news for gold.
The best way to invest in gold might be the iShares S&P TSX Global Gold Index Fund (TSX:XGD). It has exposure to 48 of the world’s largest precious metal miners, all with a very reasonable management fee.
A Trump presidency should also be bullish for energy. The way to bet aggressively on the price of energy is through the BMO Junior Oil Index ETF (TSX:ZJO), which owns 47 different Canadian and U.S. small-to-medium sized energy companies.
Small oil companies have plenty of operating leverage, which means they will do very well if the price of crude rebounds. Trump may not be able to make that happen, but his administration should be quite friendly to the sector.
