What Trump's Win and China's Stimulus Mean for Your Money 💰️ 

It’s time to pivot.

Pivot with your money, mind, and business. The question is why and how.

Fast forward to China insights

TRUMP Wins.

What does this mean for the economy?

We leave emotions out of money-making decisions. It’s how you survive as a business and as an investor. Rule #1 is NEVER GET ATTACHED.

Never get attached to a plan, investment, or politician. It’s Wall Street, and anything is possible.

Politics is a touchy subject. Simplify Wall Street isn’t here to sway opinions but to offer my journal on how we plan to ensure our investments stay safe and grow, no matter who’s in office.

Key Insights -Trump’s policy (Part 1)

Increased Tariffs on Imports (e.g., China)

• Impact: Higher tariffs mean increased costs for imported goods, potentially making everything from electronics to groceries more expensive. Companies may pass these costs on to consumers, raising prices.

Trump proposes tariffs of 10% to 20% on foreign goods — and, in some speeches, has mentioned even higher percentages. He pledges to block purchases of “any vital infrastructure” in the U.S. by Chinese buyers. [PBS Read more.]

• Solution:

With Trump's stance on tariffs and trade, investors can consider the following strategies:

1. Invest in U.S. Manufacturers: Companies focused on domestic production, like Caterpillar (CAT) or Deere (DE), might benefit from reduced competition due to tariffs. This means similar companies cannot afford to lose China as a key supplier.

2. Avoid Overexposure to stocks with heavy Foreign Imports: Consider limiting investments in companies heavily dependent on international supply chains or those with significant exposure to China.

3. Explore Domestic Essential Goods: U.S.-based companies that produce essential goods (e.g., Procter & Gamble (PG)) could see steady demand regardless of trade policies.

4. Food & Beverage: Companies like Hormel Foods (HRL) and General Mills (GIS) produce food in the U.S., which shields them from tariffs and price hikes that might impact companies more dependent on international suppliers.

Note: tariffs are in place because they encourage consumers to buy American-made products. If prices increase, then it’s best to invest in companies that increase in value as you spend. A diverse strategy is to invest in ETFs, index funds, or mutual funds instead of picking individual stocks.

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RE & EV Policy’s (Part 2)

Electric Vehicles and Renewable Energy

Trump, who falsely claims that climate change is a “hoax,” blasts the Biden era for their spending on cleaner energy designed to reduce U.S. reliance on fossil fuels. He proposes an energy policy and transportation infrastructure spending anchored to fossil fuels: roads, bridges, and combustion-engine vehicles.

Trump says he does not oppose electric vehicles but promises to end all Biden incentives to encourage EV market development.

Solution

If you're an investor, Trump's energy policies focused on fossil fuels may benefit industries like oil and gas (e.g., ExxonMobil (XOM) or Chevron (CVX)) and traditional automotive companies (e.g., Ford (F), General Motors (GM)). He may also roll back fuel efficiency standards, which could support combustion engine vehicle manufacturers.

However, the electric vehicle (EV) market might face headwinds under his plan, so you may want to reassess exposure to EV stocks like Tesla (TSLA) or related technologies. Diversifying across sectors could be wise.

Hmm.. why did Tesla stock increase if Trump is against Electric Vehicles?

Tesla is bigger and more advanced than any other company in the electric vehicle (EV) industry. This could give Elon Musk and Tesla an edge, especially if there are no government subsidies for EVs. Additionally, increasing tariffs on Chinese goods could prevent cheaper Chinese EVs from entering the US market, benefiting Tesla.

Other EV stocks are down sharply, with Rivian Automotive Inc.'s (RIVN) off 9.0% and Lucid Group Inc.'s (LCID) down 4.4%

Don’t know where to start? Start Here 

Small Caps Policy’s (Part 3)

Small-cap stocks tend to benefit from a growing economy and interest-rate cuts. Will the Federal Reserve continue to cut rates? Trump wants the ability to decide. Will he get it? Who knows. As investors, we look at all options, and history has shown us that small caps do well.

1. During Donald Trump's presidency, there were several instances that positively impacted small-cap stocks, largely driven by his economic policies. The most notable policy was the Tax Cuts and Jobs Act (TCJA) of 2017. This law reduced the corporate tax rate and specifically benefited pass-through companies, many of which are smaller businesses or small-cap stocks. These companies saw an immediate boost from the tax savings, which allowed them to invest in expansion, hire more employees, and increase their market presence.

2. During Trump’s presidency, his less stringent stance on antitrust regulations and deregulation policies benefited mergers and acquisitions (M&A). The Federal Trade Commission (FTC) and Department of Justice (DOJ) were less aggressive in blocking deals, making it easier for businesses—especially smaller ones—to merge or acquire competitors without facing heavy regulatory scrutiny.

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Solutions

• Small-cap stocks with strong balance sheets, strategic partnerships, and a clear growth path may benefit the most from fewer regulatory barriers, tax cuts, and increased M&A activity.

• This is key because if there are any rumors about a company merger, I would expect it to happen.

Free Discord (Ask Us Questions)

Investing In China Good or Bad?

Though the U.S. wants to be “American Made,” we need China.

1. Global Supply Chains: China supplies critical materials like rare earth metals and manufactures many finished goods, especially electronics, at lower costs.

2. Economic Interdependence: China is a major U.S. trading partner, and severing ties could raise costs and disrupt U.S. investment markets.

3. Cost-Effectiveness: Labor in China is cheaper, making it difficult for U.S. manufacturers to match prices, particularly in industries requiring low-skilled labor.

4. Technology & Innovation: Many U.S. tech companies depend on Chinese suppliers for components and assembly.

While seeking more domestic production is important, cutting ties with China would increase costs and disrupt the economy.

China Stimulus Update

China’s government expects a stimulus package of more than 10 trillion yuan ($1.39 billion), with about 6 trillion yuan going towards local government debt swaps and bank recapitalization. More than 4 trillion yuan will likely go towards local government special bonds for supporting real estate, Su said. She did not specify over what time period. (CNBC)

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Actions Taken by China:

• Investment in Tech: China has bolstered its technology sector by encouraging bank loans to high-end manufacturing, aiming to reduce dependence on foreign tech: In response to U.S. restrictions, China has increased efforts to develop its own semiconductors and advanced technology.

Actions Taken by the U.S.:

• Huawei Blacklist: During his first term, Trump blacklisted Huawei, a major Chinese telecom company, preventing it from accessing U.S. suppliers and technology.

• Democrats and Republicans supported export controls, especially to boost U.S. semiconductor manufacturing and limit China's access to cutting-edge U.S. technology.

These actions highlight the ongoing push-pull between the tech and trade sectors. Both countries are trying to advance their own technological and economic interests while weighing the risks of decoupling.

—

Solution

As an investor and consumer, here are the key factors I’m monitoring:

1. U.S. Semiconductor Growth

   • The U.S. is focusing on reducing its reliance on China by growing its own semiconductor industry. Companies like NVIDIA, Intel, and AMD stand to benefit from domestic production incentives. I’m also considering ETFs like VanEck Vectors Semiconductor ETF (SMH) to diversify within this space.

2. Tech Sectors Less Impacted by Trade Restrictions

   • Cloud computing, software, and cybersecurity are sectors that are less dependent on China. Tech ETFs such as Invesco QQQ and SPDR S&P 500 Technology ETF (XLK) are worth monitoring for exposure to these industries.

3. Domestic Manufacturing and Consumer Goods

   • U.S. companies like Procter & Gamble (PG) and Caterpillar (CAT), which produce goods domestically, are less likely to be affected by tariffs and trade disruptions, making them attractive for steady growth.

4. Chinese Tech Stocks (Higher Risk)

   • Although China is pushing to become tech self-sufficient, companies like Alibaba and Tencent still hold strong consumer bases. However, these stocks come with higher risk due to ongoing trade restrictions, so I would consider them cautiously.

5. Global Diversification

   • I’m also exploring global ETFs that focus on emerging markets outside China, like iShares MSCI All Country World ex China ETF (AAXJ). This helps reduce exposure to U.S.-China tensions while allowing me to tap into broader global growth.

Investment Readiness
If you’re not ready to invest yet, that’s perfectly okay. With interest rates still relatively high, savings accounts or certificates of deposit (CDs) are great alternatives, offering around 4.5% on your money for the next few years. These options provide a safer place to park cash while earning a decent return without the risk of market volatility.