Investing in… populism?

The word ‘populism’ is now heard everyday around the world. From journalists to teenagers, this political trend has penetrated on societies and not only on those affected by extreme poverty.
Donald Trump and Marine Le Pen are just two great examples of how populism has become an alternative for first world voters, despite winning or losing elections.
While populism has proven to be quite an inefficient political platform for economic development, investors can take advantage of populist policies.
After studying several cases, such as Chavez’s Venezuela or the most recent Duarte’s Philippines, analysts defined three areas that populists are always caring about.

Infrastructure
Populists leaders tend to put infrastructure renovation and investment in first place. Want an example? Check Trump’s Make America Great Again policies. The idea behind is that all citizens should be happier with better roads, bridges, public transportation, etc.
In other words, investors could take an interest on companies providing construction services or raw materials, such as cement makers, steel producers, manufacturers, big engineering firms.

Labor market
Building strong labor market conditions is another priority of populist regimes, at least for some. While putting people to work and reaching full employment is considered a common objective for most governments around the world, no matter their political orientation, populists would go a step further, promoting special conditions for employers in order to boost hiring.
With this line of thinking, we could see big manufacturers in sectors such automobiles, telecommunications, transportation or construction receiving substantial benefits from the central authorities, meaning less taxes or favorable conditions for international deals.
Typically, these actions would target low-skilled workers, although some countries encourage community to take free courses, pushing them into high paycheck jobs. Better market conditions translate into more money in people’s pockets, which ultimately promotes higher consumption.

Defense
National security is without doubts a key aspect of the populist agenda. In this case, keep an eye on gun manufacturers, especially those supplying armies, or simply go for an ETF to cover up. With digital threats rising every hour, you could also include some cybersecurity and antivirus companies in your portfolio.