Trump or Clinton? Both Will Greatly Benefit Industrial ETFs

From Paul Mampilly: Whether Clinton or Trump is elected this November, we’re going to see a huge infrastructure spending increase, which will greatly benefit the industrials.

“Daddy, he took my book,” my daughter cried.

“I only took it because she took my pencil,” my son said.

And on and on it goes.

Every day, my daughter and son find reasons to fight about nothing at all. Most of the time, minutes after a fight, they’ve forgotten their disagreement and are back to playing, reading, drawing or studying.

And then they are back to it. “Daddy…”

However, sometimes they do something that’s truly remarkable…

There are rare moments when they actually agree with each other and resolve problems on their own.

Watching this whole drama play out day after day with my children always reminds me of how our political system works. Every day, Democrats and Republicans find reasons to disagree.

And a day or two later, both sides have shifted their attention to the next hot-button topic to fight about.

However, every once in a while, the people in our political parties actually agree on doing something.

And in the middle of this incredibly polarizing election year, it turns out our politicians agree on one thing: Both sides want to spend money on renewing and improving our highways, bridges, airports — building up the basic infrastructure that our country depends upon.

Follow the Infrastructure Money

Hillary Clinton says she’s committed to sending her infrastructure plan to Congress in the first 100 days after she’s inaugurated. The plan she’s outlined so far is to spend $275 billion on roads, bridges, airports and public transport. The political selling point on this for Clinton is that this spending is supposed to generate 3.6 million jobs.

According to Clinton, this spending “represents the most significant increase in infrastructure investment since President Eisenhower built the Interstate Highway System.”

In case you didn’t know, the highways you and I drive on each day came about because of a 1956 act that built 47,856 miles of highway across America.

Donald Trump’s plans for infrastructure make Clinton look like a cheapskate. Trump is proposing to spend $1 trillion dollars and create 13 million jobs.

Trump estimates that his $1 trillion in spending will generate a return of 44%, creating $1.44 trillion for the U.S. economy.

Now, as an investor, I’m not interested in debating the competing plans. Instead, I want to focus on the main idea, which is that, irrespective of who gets elected, we’re going to see billions of dollars go to companies that are involved in infrastructure.

The Next Automotive Revolution

Personally, my take is that a lot of this spending is going to benefit an emerging new technology that companies are spending billions to develop today: self-driving cars.

And this spending, I believe, is a good thing. You see, I believe that quite a bit of the infrastructure spending on roads is going to actually make our roads ready for self-driving cars.

For example, one thing we can do to make self-driving cars easier to run is if all traffic lights had a common design. That way a self-driving car would need to recognize only one kind of traffic-light configuration.

We could also standardize road signs, road line markers and road lighting. By standardizing these things, it would reduce the complexity of conditions that a self-driving car would need to understand … and make their introduction and operation smoother than under current conditions.

I believe that irrespective of who is elected, we’ll see money spent to further the development of self-driving cars. That’s because car companies are making big investments on this technology.

Just this week, Ford announced it’s doubling the staff on its self-driving initiative and spending $150 million on a special laser-based sensor that’s a critical component for this technology.

Uber, the ride-sharing company, announced plans to release a self-driving car this month.

And yesterday, Mobileye, a maker of seeing technology for self-driving cars, and Delphi, an auto-parts maker, agreed to team up to build their own laser-based sensor.

The critical point is that a huge wave of spending is coming to build our infrastructure. A lot of it is going to build our transportation system up for self-driving cars, I believe.

There are two ways you get in on this trade. First, you can buy the Industrials Select Sector SPDR Fund (NYSE Arca: XLI), which will get you in on the “tar and concrete” part of this trade. (Just for reference, I recommended the Industrials Select Sector SPDR Fund to you on March 3. And this exchange-traded fund [ETF] is up 10% since then.)

Second, you buy the VanEck Vectors Semiconductor ETF (NYSE Arca: SMH), which will get you into the electronic side of the self-driving car trend. This is the same ETF I recommended on June 16, and it’s up 17% up since then.

Infrastructure and self-driving cars are an incredible money-making opportunity today. And one that you should try and catch a piece of irrespective of who gets elected this year.


The Industrial Select Sector SPDR Fund (NYSE:XLI) rose $0.11 (+0.19%) to $58.94 per share in premarket trading Friday. The XLI has gained nearly 11% year-to-date, beating out the 7% gain of the benchmark S&P 500 in the same period.

This article is brought to you courtesy of The Sovereign Investor.

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