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Donald Trump is about to take office as the 45th president of the United States. That will have a myriad of impacts in several arenas – politics, economics, social issues, you name it.
But from an investment standpoint, one of the biggest impacts he’s having is on the defense industry. Simply put, Trump is pledging to unleash the biggest boom in defense spending this country has ever seen! Just like Ronald Reagan went all out in the early 1980s to defeat the so-called “Evil Empire,” Trump wants to overwhelm our enemies with a massive build up in U.S. military might.
Ships. Planes. Tanks. Troops. Cyberdefense and counterterrorism capabilities. He wants more of it all to “Make America’s Military Great Again” … and with a Republican-led House and Senate by his side, he’ll likely have the votes to do it. Hundreds of billions — even TRILLIONS — of dollars will pour forth from Washington to a wide range of waiting companies.
My team and I have been hard at work combing through the sector to find the best individual stocks to help you profit. We’ll have more details on that very shortly. But in the meantime, the best defense in this market may be a good defense sector ETF.
I’ve identified five ETFs that focus specifically on either the traditional defense sector, or the emerging cyberwarfare industry. To help track them, I created an ETF Screener called “Defense & Cyberwarfare ETFs” using the tools available on the Weiss Ratings website. (You’ll need a Weiss Platinum subscription to view it, which you can easily sign up for here if you’re not on board yet)
The Screener makes clear just how powerful the “Trump Effect” has been. The worst performer on my list of ETFs is the PureFunds ISE Cyber Security ETF (HACK, Rated “C-”), and it’s still up more than 19% in the last 12 months. The best performer, the SPDR S&P Aerospace & Defense ETF (XAR, Rated “B”), is up a hefty 29.5%. Four out of five of the defense ETFs beat the 20.5% return of the SPDR S&P 500 Trust (SPY) over the same time period.
The BUY-rated ETFs on this list are definitely worth a look, given the multi-year rise in spending that’s headed our way. Plus, as I mentioned earlier, I’ll have more details soon on how you can go for even greater profits from a Trump-driven defense sector bonanza.
Until next time,
Mike Larson
ETF Spotlight Edition , by Mike Larson, Senior Analyst Mike Larson is a Senior Analyst for Weiss Ratings. A graduate of Boston University, Mike Larson formerly worked at Bankrate.com and Bloomberg News, and is regularly featured on CNBC, CNN, Fox Business News and Bloomberg Television as well as many national radio programs. Due to the astonishing accuracy of his forecasts and warnings, Mike Larson is often quoted by the Washington Post, Chicago Tribune, As-sociated Press, Reuters, CNNMoney and many others. |
