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Investing in the United States in the Election Year

19. June, 2024
Investing in the United States in the Election Year

How to Take Advantage of the Electoral Uncertainty of the World’s Leading Economy

2024 is shaping up to be a pivotal year both economically and politically:

  • Return of inflation to acceptable levels
  • End of interest rate hikes by Central Banks
  • European elections
  • Start of rate cuts
  • U.S. elections

Alongside these almost certain events, there is also the hopeful end of conflicts in Ukraine and the Gaza Strip.

Those looking to invest in the United States at this time are particularly focused on the rate cuts and the presidential elections on November 5th.

Without delving into predictions and polls, in this article we prefer to concentrate on and compare the economic policies proposed by the two candidates to understand what type of United States will emerge from the polls and how this will concretely reflect for those who have already invested or are thinking of investing in the USA.

Joe Biden, His Economic Proposals, and the Message for Those Wishing to Invest in the United States

The current President is in a complex situation. On one hand, he can boast impressive results with the U.S. economy growing last year well beyond expectations (2.5%), outpacing other advanced economies (Eurozone 0.5%, Japan 1.9%, United Kingdom 0.1%). It is likely that, albeit to a lesser extent, the same will happen in 2024. Record low unemployment rates, at or below 4% for 30 months (the longest period in 50 years), have also been achieved. Paradoxically, this has pushed up wages and prices, with the classic burger and fries surpassing the psychological threshold of $18, making the middle class feel impoverished. Therefore, on the other hand, the perception of John Smith—the average American—is that of having lost purchasing power, and this could work against “Sleepy Joe” at the polls.

From an economic standpoint, the current White House occupant declares himself a “friendly capitalist“. His approach perfectly aligns with the U.S. Democratic Party’s stance: “Earn all the money you want, but start paying your fair share of taxes“. Taxes in the United States are significantly lower compared to Europe and Latin America, favoring foreign investors, such as those investing in the U.S. through income properties.

Donald Trump, His Economic Proposals, and the Message for Those Wishing to Invest in the United States

Former President Donald Trump, whose popularity seems unshaken by his convictions, holds a very different fiscal stance. In a recent interview with NBC, he stated, “The State invades every aspect of our lives and is voracious beyond measure: taxes need to be slashed“. In terms of foreign policy, Trump, after declaring he could resolve the war following Russia’s invasion of Ukraine “in 24 hours“, criticized the current administration by claiming to have a plan that includes Ukraine ceding Crimea and Donbass to Russia.

These bold declarations echo the core tenets of the Republican Party and the Tycoon: tax cuts for large corporations and the super-rich, protectionist trade policies to make America “Great again“, and deregulation policies affecting the financial, energy, and environmental sectors. Notably, the former President had called climate change “a hoax” and had proposed a free-for-all approach to oil operations. All these messages are also aimed at those looking to invest in the United States.

Antithetical Proposals and the General Framework

Beyond evaluating the candidates’ proposals, what emerges is an America at a crossroads. Whether one or the other candidate wins, even if by a handful of votes, the United States will choose one path or another and will no longer be the same.

This creates an overall framework of (short-term) uncertainty that benefits those wishing to invest in the United States. Until November 5th, the U.S. will be on the edge, and whoever wins will likely see market favor first and then economic indicators, leading to a strengthening of the dollar. This is exactly what happened in 2020 when Biden won and in 2016 when Trump won.

Such a situation benefits those who have timely invested in the United States, taking advantage of the uncertainty to their benefit.

How to Invest in the United States in the Election Year

Among the tools to invest in the United States and benefit from the economic-political framework are, undoubtedly, income properties. These can currently be purchased at a lower price than they would have with lower rates and a certain political situation, and lower than they will be once inflation is under control and the Fed can cut rates under a long-term presidency. Thus, “discounted” properties capable of generating interesting long-term capital gains.

Additionally, income properties provide immediate returns from the rent paid by tenants, generally between 6% and 10% annually relative to the property value. These returns are quite significant, considering that they are safe investments subject to less volatility compared to stock and bond markets, which have started to waver following the European elections.

Invest in the United States with Opisas in the Election Year

To seize the opportunity presented by the unique economic-political phase determined by the presidential elections, invest in the United States with Opisas through an income property. Contact us at contact@opisas.com to schedule an appointment with a consultant who speaks your language.

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