Election 2020 has come and gone.
Much like the rest of the year, it was a most unusual, erratic, and turbulent election, full of surprises and twists and turns. It was “so 2020.”
But… you know what else is “so 2020”? A surging stock market.
Following Election Day, the S&P 500 and Nasdaq Composite both rose more than 2% – booking their best postelection rallies in history – and their uptrend has exhibited hyper-healthy signs ever since.
Because the next few years are shaping up to be extremely bullish for stocks.
For starters, Wall Street was the real winner of the 2020 Election. The Street got exactly what it wanted in a divided government, which will essentially keep tax rates low and business regulations relatively loose for the next four years.
There have also been significant developments on the Covid-19 vaccine front.
Pfizer announced that early data for its Covid-19 vaccine is showing it to be 90% effective, while Moderna’s vaccine is coming in at 94.5% efficacy. Those are impressively strong numbers – much better than anyone expected, as the flu vaccine normally clocks in around 50% to 70% efficacy.
Plus, interest rates are still at zero and central banks appear committed to easy monetary policy for the next few years.
Add it all up, and you get a bullish concoction for Wall Street.
That’s the good news for investors.
But there’s even better news: the next few years are shaping up to be exceptionally bullish for many of the emerging hypergrowth megatrends that we follow closely.
Because on the heels of Election 2020, we are starting to see some major legislative changes set the stage for disruptive, breakneck growth across a variety of emerging industries over the next few years.
Which industries exactly?
Glad you asked – let’s take a peek at my biggest hypergrowth investment takeaways from the Election:
- The cannabis megatrend is gaining momentum. Five states had cannabis legalization on the ballot. All five passed it, including some traditionally conservative states like Montana and Arizona. It increasingly appears that federal legalization of cannabis is an inevitability – and until then, widespread legalization in all major urban areas across the U.S. will spark big growth for emerging pot stocks in the coming months. On the back of these favorable legal developments, pot stocks such as Canopy Growth (CGC) and Cronos (CRON) look well-positioned for marijuana bulls.
- The iGaming market is ready for its big breakout. Three states – Maryland, South Dakota, and Louisiana – voted to legalize sports betting, joining 18 other states and Washington D.C. This number will keep ticking higher over the next few years, meaning that the bull thesis on DraftKings (DKNG) turning into a national online sports betting powerhouse has never looked so compelling.
- The solar megatrend is too powerful to be derailed. Solar stocks fell after the election because Democrats failing to flip the House also reduced the likelihood of sweeping climate policy change, which included higher solar rebates. But higher rebates aren’t driving robust solar adoption – falling costs, improving technology and shifting demand are driving the megatrend. So, top-tier solar stocks like First Solar (FSLR) and Sunrun (RUN) have rebounded vigorously from their post-Election sell-offs, and look ready to keep flying high over the next few years.
- The first domino has fallen for the “shroom boom.” Washington D.C. and Oregon both passed measures to decriminalize/legalize psilocybin, or the active ingredient in magic mushrooms. This is the first legal domino to fall for the shroom boom, and it comes on the heels of a wave of research showing that psychedelic-inspired medicines are excellent treatments for mental health and addiction disorders. Further legalization in coming years will set the stage for Shroom stocks – like COMPASS Pathways (CMPS) – to emerge as big-time winners.
In a nutshell, Election Day 2020 injected a ton of legal firepower into multiple hypergrowth megatrends.
That’s on top of creating a bullish backdrop for the broader stock market through a business-friendly divided government, highly effective Covid-19 vaccines, and continued robust support from central banks.
See where I’m going with this?
There has never been a better time to invest in hypergrowth stocks – and over the next few days, we will tell about which hypergrowth stocks look particularly compelling against this bullish backdrop.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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