I, along with many other Fools, have long argued that Australian investors would be well-served by including some significant exposure to US stocks in their investing portfolios, alongside ASX shares.
The United States has been the engine room of the global economy since at least the end of the Second World War, and arguably before that. It has long housed the vast majority of the best and most influential companies in the world. That continues today, with names like Apple, Microsoft, Coca-Cola, and Amazon recognisable right around the world. Although the ASX houses many admirable companies, we simply cannot match the US in this regard.
Yet, many Australian investors that I've talked to have voiced the same concern to me over the past 12 months. They simply don't feel comfortable investing in American businesses with Donald Trump in the White House.
Regardless of political beliefs, it cannot be denied that Mr Trump is a divisive figure. His economic and foreign policies often change on a whim. And while his eccentric methods may have arguably yielded positive results in certain areas, it cannot be denied that fostering economic or political certainty is not a hallmark of either his first or his second (at least thus far) administration.
So, should the current occupant of the White House deter ASX investors from investing in US stocks?
Well, no. At least not in my opinion.
There's a range of factors behind my view here.
US stocks are safe under Trump
Firstly, President Trump's policies (with the possible exception of tariffs) have actually been highly beneficial to US business. His administration has repeatedly cut corporate tax rates, and reduced regulations. Trump himself has long expressed a desire to see the stock market continue to break record highs, and is unlikely to take or maintain actions that would do anything to jeopardise that. We have seen him back down from policies or ideas due to pressure from business and the markets before.
Secondly, long-term investors have to look beyond one presidential administration. The United States is a country that has been around for centuries now. One Oval Office occupant with three years left to serve in his final term is not likely to truly affect US economic growth for decades to come. At least in my view.
That's also the view of legendary investor Warren Buffett. Buffett has long told investors right around the world to "never bet against America". In 2017, just after Trump was sworn in for the first time, he told CNBC that America had "the secret sauce" and would "work fine under Donald Trump". He went on to say that America "doesn't work all the time perfectly, but you just look at where we go, milestone after milestone".
That's good enough for me. So while you may or may not love America with Trump at the helm, there's no doubt in my mind that it will continue to be the home of most of the world's best businesses for decades to come.
