Portfolio Positioning for the $1.2 Trillion Infrastructure Bill

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Regardless of which side of the aisle you are on, the Infrastructure Investment and Jobs Act affects everyone financially and mentally, and advisors should prepare client money and minds for this historic (albeit non-transformational) event.

That $1.2 trillion is going to be spent over the next 10 years, so don’t overthink it. Some companies are going to see substantial growth, but not all. Individual stock positions such as John Deere, Caterpillar, Nucor have seen a jump in price recently, but that is hardly indicative of substantial future growth in those individual companies. Instead of trying to get lucky by picking an individual winner, focus efforts on portfolio construction with sound long-term themes, with the infrastructure bill driving disruptive innovation being one of those themes.

Don’t miss out on the broad picture by trying to hit on the roulette wheel of stocks. Rather, utilize a core-satellite approach and bolt on these long-term thematic positions to take advantage over longer terms using efficient ETFs.

Many investors are being very cautious, saying that the market is overvalued and stretched beyond comprehension, and volatility will create massive turbulence in asset prices. While those statements make great headlines, I do not share those same concerns, and neither should your clients.

During a recent interview I hosted, Mark DiOrio, CFA®, chief investment officer of $8.5 billion RIA Brookstone Capital Management stated, “I think the broader theme is that the economy and stocks continue to hum along and earnings growth is very strong…there’s a lot of beneficiaries at play here…”