Sectors Set to Thrive Under the Biden Administration
With Biden set to become the 46th President of the United States, there are likely to be many policy changes. The Biden administration has already given some details on their economic plans and from that, we can predict specific industries that might benefit from beneficial policies. In this article, I’m going to discuss potential initiatives that might be implemented during the Biden Administration and how you may be able to gain by investing in companies and sectors that will benefit from these initiatives. Here’s a quick list of the sectors we will be covering today.
Renewable Energy
Joe Biden wants America to lead the way in clean energy manufacturing and infrastructure; by doing so he plans to create 10 million new clean energy jobs. He plans to invest billions of dollars in clean energy technology; incentives and subsidies could nudge companies, and individuals, to adopt solar power. This means that any company tied to clean energy, either through the manufacturing, development, or distribution of solar and wind power, can potentially expect revenue growth.
For example, Enphase (ENPH) and SunRun (RUN), two companies involved in solar energy, have seen revenue increases year-over-year for the past 3 years. As a result, their stock prices have grown by over 200%. With the Biden Administration’s effort to ramp up solar production and implementation, I predict that these companies can expect to see continued growth in the coming years. If you’re looking for an ETF that will help expose your portfolio to the sector of clean energy, you can look into ALPS Clean Energy (ACES) and iShares Global Clean Energy (ICLN).
Electric Cars
Biden also wants to create 1 million new auto jobs focusing on electric vehicles built in the US. TESLA seems like the clear winner right now in EV market dominance. The number of plug-in electric cars sold in the US jumped from around 200,000 in 2017 to over 300,000 sold in both 2018 and 2019. If Biden creates new incentives to buy electric cars, we can expect these numbers to increase.
Recreational Marijuana
As of 2020, 35 states have legalized medicinal marijuana and 15 states have legalized recreational marijuana, yet it is still a federal crime to be in the possession of marijuana. The Biden-Harris administration has committed to reforming the criminal justice system by stopping incarceration for possession of small amounts of drugs, but it’s still uncertain whether marijuana will be decriminalized at a federal level. If the Federal Government under the Biden Administration decides to decriminalize Marijuana this could mean more business and growth for current publicly traded companies like CGC and TLRY. We may also see some new companies operating out of the US emerge and IPO.
General Stock Market Growth
Biden also plans to invest billions of dollars in rebuilding US infrastructures, such as roads, hospitals, water distribution pipelines, ports, small cities, and schools. He also plans to continue Obama-era initiatives that helped small businesses and local manufacturing. I expect the overall market to continue to grow during the new presidential administration with all the initiatives planned by Biden and without the turbulence caused by tariffs and trade wars.