The prospects of investing during the Biden administration changed dramatically when Democrats won the two senate seats in Georgia. Now the bulk of legislation including another stimulus will progress unimpeded, at least in the beginning. A lot has been written about Biden stocks to buy and stimulus stocks to be in the run up to the election but there was always the likelihood of a fight with the Republican controlled Senate. Although every vote in the Senate may require a tie breaker vote by Vice President Harris as President of the Senate, Biden will start his term being forced to govern by executive order as Obama and, to a degree, Trump were.
Biden Stimulus Stocks to Buy
On Christmas Day The Motley Fool wrote about stimulus stocks to buy with your $600 stimulus payment. The same arguments can be applied to what will likely be a $2,000 stimulus check that comes with a massive Covid-19 relief bill during the first days of the Biden administration. The Fool suggests Bank of America, Teladoc Health, and Fastly. The basic argument for BOA is that banks get downgraded during recessions and return to being money making machines as the recession goes away.
Teladoc Health is the leading provider of remote health care services. The industry has learned during the pandemic that this is an efficient way to provide health care to lots of people who only need to talk to the doctor and don’t necessarily need an exam.
Fastly is a fast-growing tech company that is an up and coming cloud service provider. Our concern with this one is its volatility over the last year.
Biden Stocks to Buy
This group is a more important one to focus on for longer term investors. The issue here is not just what stocks may benefit from a stimulus or stocks you can use your stimulus money to invest in. Socially responsible investing may do quite well as the government pivots to favor green investments. Like with the stimulus stocks, the “Biden” investments got a big boost when the Democrats took both Georgia Senate seats.
We will likely see a lot of infrastructure spending with the intent of fixing things and creating jobs. This is an ideal time to borrow to fund these projects with interest rates nearly at zero.
We will not see a big move back to being friends with China but some of the foolishness related to the trade war will go away. We will also see an attempt to rebuild ties and get into trade deals with allies which Trump gave away in the early days of his administration. These efforts will hopefully help US industry and US agriculture and provide related investment opportunities.
Investing Tips for Biden Years
There is a lot of enthusiasm right now that the Democrats will have control of both houses of Congress and the Presidency. But, that has happened before and the party fell to infighting and did not accomplish much. Our take is that there will be a lot of focus on following Biden’s lead for most of 2021.
Once the pandemic has subsided and a degree of normalcy has returned to our political discourse, we can expect to see groups splintering off into different interest groups within the Democratic Party. What happens to the Republicans will be another matter. There is a strong possibility of the “Trump” wing splintering off without their standard bearer in the White House. If Trump has to deal with serious legal problems after he leaves office that could also alter the equation. A weakened Republican party could extend Biden’s influence for years and even into a second administration.
Investing During the Biden Administration – Slideshare Version