What It Means For Alternative Investments

The impact of a Trump’s return to presidency on alternative investments depends on the details of policy implementation, market

expectations, and global economic conditions.

While some sectors may benefit from deregulation or tax incentives, others might face reduced government support or policy shifts. Investors considering alternative strategies should proactively adjust their portfolios to anticipate these potential changes, prioritizing sectors that are likely to receive favorable treatment or have inherent resilience to policy-induced volatility.

Sectors Likely to Benefit from the Impact From Trump’s Return

Commodities and Natural Resources: Trump expressed intention to expand energy and mining by promoting policies that boost domestic oil and gas production via deregulation and streamlined infrastructure projects, such as pipelines, to lower costs and increase supply. Relaxing environmental regulations could expand access to mineral-rich lands, benefiting coal, precious metals, and rare earth industries, while it also reduces reliance on foreign suppliers like China. This includes oil and natural gas investments, which can be helpful during tax time

Real Estate: Real estate investments, like REITs (Real Estate Investment Trusts), DSTs (Delaware Statutory Trusts), and Opportunity Zone properties, can be influenced in many ways. When Trump was president, his policies—like tax cuts and fewer regulations—helped boost the economy and made real estate more attractive, especially for people looking for tax-friendly investments.

Going forward, his influence could show up in changes to tax laws, interest rates, and how people feel about the market. Leadership and rule changes can also affect real estate values, especially in areas labeled as Opportunity Zones, which were designed to encourage investment in underserved communities.

Infrastructure Funds: Given the bipartisan acknowledgment of America’s infrastructure needs, but with Trump’s strong emphasis on reinvestment and revitalization, infrastructure is not just a national priority—it’s a savvy investment strategy. There are investment opportunities to fix infrastructure, while also make money for yourself. Alternative investments offer a myriad of diverse opportunities, in both specialized funds and broader portfolios that span multiple sectors. Investing in infrastructure aligns with Trump’s vision of a stronger, self-reliant America, and he has consistently advocated for large-scale infrastructure projects, focusing on energy, transportation, utilities, communications, and more.

Defense and Security: While always advocating for increased military spending to ensure U.S. strength and global leadership, the proposed DOGE plan aims to cut waste by making military spending clearer and more efficient. Trump worked on modernizing the military with advanced technologies, such as space defense, hypersonic weapons, and cyber capabilities, while supporting troops with better pay, benefits, and training. He has also urged NATO allies to increase their defense contributions, reducing the financial burden on the U.S. He linked economic strength to national security, framing military investments as critical to countering emerging threats like cybersecurity challenges and adversaries.

Cryptocurrencies and Blockchain Technologies

Blockchain technology can also play a pivotal role in defense operation optimizing by enhancing supply chain transparency and reducing fraud in military procurement. Additionally, blockchain enables scalability, allowing forces to rapidly adapt to emerging threats and ensuring flexibility in defense strategies

Trump aims to make the US the “crypto capital of the world” and a “bitcoin superpower,” promising to embrace cryptocurrency if elected. He plans to create a “strategic national bitcoin stockpile” to cement Bitcoin’s status as a reserve asset. Trump criticized the current administration’s crypto regulation, promising to fire SEC Chair Gary Gensler and establish a crypto advisory council for transparent guidance. Following Trump’s comments and promises, Bitcoin’s price and the crypto market were positively impacted, reflecting investor enthusiasm for his crypto-friendly policies. skepticism and opportunism exist. While Trump’s shift towards crypto is seen as opportunistic, it also reflects political recognition of cryptocurrency’s growing influence.

There are also some changes that will affect more than just alternative investments

Regulatory Changes: A potential Trump presidency could lead to substantial deregulation, particularly advantageous for sectors such as cryptocurrency, which have advocated for less restrictive policies. This could manifest in reduced SEC oversight, potentially facilitating the launch of new crypto projects and the operation of existing ones with diminished compliance burdens.

Economic Policy Implications: Trump’s economic policies, which may include tax reductions and deregulation, could stimulate increased investment in sectors that thrive under these conditions. However, this includes the risk of elevated deficits, potentially impacting interest rates and, consequently, investments sensitive to rate fluctuations, such as high-yield bonds or certain real estate investments.

Short Selling and Market Manipulation: Speculation exists regarding Trump’s stance on short selling, which could significantly alter market dynamics if restrictions were implemented, potentially impacting the operations of alternative investments like hedge funds.

Cultural and Political Shift: The mention of a potential return to traditional values may influence investment decisions in sectors perceived to align with these values, potentially at the expense of those perceived as “woke” or progressive, affecting sectors such as media, entertainment, and technology companies that focus on social issues.

Most Likely To Be Negatively Impacted by the Trump Presidency

Green Energy Investments there’s a shift away from green subsidies, or if environmental regulations are relaxed, renewable energy investments might see a downturn. The sentiment from some X posts suggests a negative impact on green stocks post-election.

Socially responsible investments and ESG funds: A Republican administration might not prioritize, or could even roll back, initiatives promoting environmental, social, and governance (ESG) criteria, potentially affecting the appeal of ESG-focused funds.

Globally diversified funds: If there’s an increase in protectionist policies or trade wars, and funds heavily invested outside the U.S. might face headwinds due to currency fluctuations or trade barriers.

Interest rate sensitive investments: If fiscal policies lead to higher deficits and, consequently, higher interest rates, strategies like high-yield bonds or certain real estate investments could be hurt by increased borrowing costs.

Regardless of which party is in power, there are always reasons to diversify and if you are an accredited investor, you should consider having some exposure to each of these areas.

Securities are offered through Arkadios Capital. Member FINRA/SIPC. Advisory services are offered through Creative Capital Wealth Management Group. Creative Capital Wealth Management Group and Arkadios are not affiliated through any ownership. This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice.