Trump euphoria has clearly taken control of the U.S. stock market since Donald Trump’s surprising and historic victory on November 8, 2016. As of the close of business on December 9, 2016, the S&P 500 index has risen 5.84% and the Dow Jones Industrial Average has climbed 8.15%, both on a total return basis, since Election Day – both reaching all-time respective highs. With many market analysts believing that a Trump administration would be a positive for economic growth potential, many analysts also currently believe that the Federal Reserve (Fed) should feel comfortable beginning to embark upon their long awaited gradual period of tightening, with a rate hike of 25 basis points (i.e. 0.25%) to be expected after their upcoming meeting concludes this Wednesday, December 14.

The confluence of these two scenarios begs the question of how investors might want to consider positioning their portfolios looking ahead, recognizing of course that portfolios should be constructed and managed consistent with the specific objectives, risk tolerance and investment timeframe of each investor. Accordingly, we have researched both scenarios to observe; a) which asset classes and/or sectors are expected to perform relatively well during a Trump presidency and b) which asset classes and/or sectors have historically performed relatively well during previous periods of gradual interest rate increases.

First looking at the next four years under President-Elect Trump, absent any specific proposals or introduced legislation, we look to “Donald Trump’s Contract with the American Voter” for indications of what areas of the market could potentially benefit from his stated beliefs and desired directives. In this regard, we highlight below a few of the key areas from our perspective, along with the potential benefiting asset class/sector(s), with the understanding that all of these initiatives are subject to change and may not come to reality or deliver the intended results: