ETF – Using ETFs To Profit From Obama’s Plans

| May 6, 2009 | 0 Comments

The marching order of the Obama administration is “Holding true to America’s ideals”.  Over the last 100 days, they’ve tried to do that… and more.  I’ll tell you this much, the last 100 days have been anything but uneventful.

And I’ve got to tell you, in true Obama style… I’m hopeful.

President Obama is a man on a mission.  He’s already made a significant impact on a few areas… like the economy and foreign policy.  And he’s working his sphere of influence over a few others.

It’s great news for us, because every move he makes gives us a few great investment opportunities (but more on that shortly).

Let me make a small confession, while I’m hopeful, I’m not a full blown Obama maniac.  I will be if my investment account has jumped in value by the time he’s left office.  But for now, I’ll have to leave the bank account judgment for a few years down the road.

Here’s what you need to know.

The 44th President got started with a bang.  Signing the largest government spending bill ever, “The American Recovery and Reinvestment Act” certainly made some noise.  It’s a real bargain with a total price tag of $787 billion.  It’s loaded with tax cuts, funding for “shovel ready jobs”, and social spending.

It’s geared to head off a bad recession before it turns into the next Great Depression.

The good news is it seems to be working.  We’re seeing the first signs of economic improvement.  Now that imminent doom has been avoided, Obama’s broadening his horizons.

He’s made a call for a “new foundation” for the American economy.  The foundation includes broad changes in healthcare, climate change, and overhauling the culture in D.C. and on Wall Street.

Not a bad idea, but I’m worried about the unintended consequences.

Healthcare reform and cap-and-trade on greenhouse gases are two hot topics.  And they’re an economic minefield that must be navigated carefully.

Your healthcare in his hands.

The long term trend of rising healthcare costs must be held in check at some point.  And I’ll be happy when the game of “pass-the-buck” on needed reforms comes to an end.  However, if healthcare reform moves too quickly, we could see costs skyrocket.  This could strike a serious blow on our fragile economy.

An appropriate balance needs to be struck.

Then, and only then, will health care reform provide a boost to long term economic and social prosperity.

Greenhouses gasses

The proposed cap-and-trade of greenhouses gases is an entirely different ball of wax.  As it looks now, I’m not a fan, and you shouldn’t be either.  Cap-and-trade is just a backdoor tax on energy.  It will do nothing but drive up costs at a wide range of companies.

First up will be the utilities.  The huge costs of lowering CO2 emissions will be passed along to the consumer.  Can you imagine the strain on already tight consumer budgets?  This isn’t what we need while facing a slowdown in consumer spending.

But I can’t completely dismiss this as a long term positive.

Forcing the hand of companies to rethink the way we produce energy should lead to innovation of new technologies.  And new tech has always been a driving force for economic growth.

Balancing risks to the economy in the short run with the long term benefits will be tricky.  If they can pull it off, this could be a home run.  If they don’t, we could see it contribute to higher costs and inflation.

In a best case scenario, the “new foundation” for our economy can provide new business opportunities.  In the worst case, it might derail economic recovery.  I’m an optimist and hopeful Obama’s plans will create new opportunities.  But it’s going to require a lot of hard work and foresight by our government.

So how do we make money from Obama’s plans?

I’ve been discussing some of the areas where money will be made over both the near and short-term.

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Category: ETFs

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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