Easy Income From Trump’s Renewed Focus

“… massive regulation cuts, 36 new legislative bills signed, great new S.C. Justice, and Infrastructure, Healthcare and Tax Cuts in works!”

So reads Trump’s Twitter feed from two Sundays ago.

And after weeks filled with media coverage of FBI firings, investigations, Senate testimonies and more distractions, it’s good to see the president getting back to the “business” of the U.S. economy.

Business as Usual

During the last few “scandal weeks,” many of the stocks that should benefit from Trump’s stated agenda have pulled back. That’s largely because investors are worried that issues like corporate tax cuts, deregulation initiatives and infrastructure projects will get bogged down.

But now it looks like those initiatives are back on the table.

Of course, the Trump presidency will always attract its fair share of criticism and skepticism. That’s partly because of Trump’s “abrasive” personality and partly because of the controversial nature of many of Trump’s initiatives.

But this week, it looks like controversy is going to take a back seat to more progress on Trump’s economic agenda.

And whether you like Trump or not, there’s one thing we can all agree on: It’s better to make money from Trump’s influence on the market than to stand by and watch opportunities pass us by.

Financial Deregulation Hands Us an Instant Cash Payment

One of the issues Trump is making progress on is the deregulation of the financial industry.

Earlier this month, the House passed the Financial CHOICE Act, a bill aimed at repealing the Dodd-Frank regulations. Here are the main points covered by the bill:

  • Relieving healthy banks of some regulatory requirements.
  • Forcing failing banks through a bankruptcy process.
  • Requiring a cost/benefit analysis for new banking rules.
  • Boosting penalties for wrongdoers in the financial industry.
  • Scrapping the Volcker rule restricting banks from trading.

While the bill still has to be passed by the Senate (and will likely be heavily revised before being signed into law), the House bill was a big step toward deregulating the financial industry. And that’s good news for U.S. banks.

As Dodd-Frank rules are revised, banks will have more freedom to invest their own capital. They’ll be able to pay more of their extra cash to investors (in the form of dividends). And they’ll be better able to lend money to small businesses (which in turn should create more jobs).

Most banks should benefit from this financial deregulation. Shares of Bank of America, for example, have already started trading higher in anticipation of new banking rules. And I expect these bank stocks to continue to advance through summer.

If you jumped ahead of this trend, then you’re probably already seeing some decent returns. If you missed the earliest opportunities, don’t worry. There are going to be a number of chances to earn easy money as the Financial CHOICE Act gets closer to being passed in the Senate.

Even now, with the bill still under review, high optimism is being held by the country’s top banking executives. And subsequently this should prove positive for investors as well. As banks become more autonomous in their decision-making, they will be able to invest more heavily in profitable ventures which should offer shareholders a nice added revenue stream.

That’s all for today. But I’ll be back with more updates on this pending legislation as things progress.

Here’s to growing your income!


Zach Scheidt
for The Daily Reckoning

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