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There's a Wall Street saying I often repeat because it happens to be true: "The trend is your friend."
D.C. sets trends - multibillion-dollar ones - with its policies. You've got to be right there. Policy priorities, appointments, pet legislation, tax hikes - no matter your political alignment, if you're out of position, that's it. You'll have missed the boat.
The oil- and gas-heavy Energy Select Sector SPDR Fund (NYSEArca: XLE) was good for around 205% in gains during the Bush administration from 2001 to 2008.
Imagine missing out on the 69%-plus rocket-ride the whole S&P 500 took during the Trump administration, just because you didn't like the guy... or you didn't see it coming, like we did.
Take the Affordable Care Act, aka "Obamacare." It cost taxpayers a ton - personally, my yearly insurance cost exploded 233%, from $3,000 to $10,000, and I lost my primary care physician.
But, like I talk about in this video, Obamacare was pretty good if you were a healthcare CEO or lobbyist; the Healthcare Select Sector SPDR Fund (NYSEArca: XLV), which tracks the entire healthcare sector, has rocketed more than 260% since 2010.
Policies move markets. Politicians know it, lobbyists know it, Wall Street knows it, and regular investors had better know it. Call it "Government Sachs," or the "D.C.-Wall Street Pipeline," or whatever you want, I can pretty much guarantee the smart money is already on the move in advance of the administration's $1.9 trillion "American Rescue Plan."
Just like with Obamacare, the winners and losers of this thing aren't who the mainstream media narrative says.
I've got a couple of ways to make sure you're on the winning side...
Who Exactly Is This "Rescue Plan" Rescuing?
The real benefits of this legislation to regular people are far from clear.
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U.S. household net wealth rose a record $7 trillion in the fourth quarter of 2020; Americans are already clearly recovering. But not only are Americans well above the poverty line ($25,000 for a family of four) and being showered with (free) money, but blue states and cities, unions, and union pension plans are being thrown tens and hundreds of billions of dollars, for what I think are purely political reasons.
The Wall Street Journal's editorial board said of the new stimulus bill, "Only a small part of what Democrats passed is for pandemic or economic relief. It's mainly a way station on their high-speed train to a cradle-to-grave welfare-entitlement state. Most of the $1.9 trillion will flow to government unions or supposedly temporary income transfers that Democrats intend to make permanent later this year."
(Now, I'm a free-market guy, of course, and it's not hard for me to see how the road to socialism is paved with free stuff. And guess who pays for it? I've got more on that here, but be warned: I don't hold back.)
What is clear is the rest of us will have to put our money to work that much harder, because there are some $60 billion in new taxes coming with this bill. The media spin is that these are targeted at corporations, but no prizes for guessing who ultimately foots the bill when corporations have to pay more. The things you need to get by day to day could easily become much more expensive.
That's why investing with the trend is so important.
Here's One Way to Profit
Ultimately, just like with Obamacare, companies that can deliver on Biden and the Democrats' pet projects and wish lists stand to make a killing; all you need to do is make sure you're there before the ball gets rolling. I've named three in this video, which you can see here, but I've got one I can share right now.
That's UnitedHealth Group Inc. (NYSE: UNH). That's because the American Rescue Plan actually expands the ACA subsidies and provides new COBRA subsidies. Sound familiar?
In other words, there are more big giveaways to corporations like UnitedHealth. This company took down $257 billion in revenue in 2020; it's already one of the biggest players in the entire healthcare sector, and thanks to the ARP, it's probably going to get a lot bigger.
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Not only that, but looking ahead past the ARP, we can see how UnitedHealth is positioned to capitalize on policy for perhaps years to come. The Democrats are very likely to expand Medicare at some point in the next two years, and it seems clear that healthcare spending is likely to run into the hundreds of billions of dollars before the decade is out.
UnitedHealth specializes in Medicare supplemental plans and, according to Credit Suisse, nearly 23 million more people could be eligible under an expansion. UnitedHealth would be looking at millions of new potential customers, and revenue that puts that $257 billion in the shade.
Now, as I alluded to earlier, there's a lot I couldn't talk about here. And the truth is, I think this law could be much more devastating than the MSM is letting on. So, if you've got the guts to hear the unvarnished truth, go here and check out my 2021 Financial Freedom Action Plan. You'll get the chance to hear what I really think, of course - and, even better, you'll hear about some stocks to buy and steps you could take to protect yourself.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.