Larry Berman

Berman's Call

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When Donald Trump became U.S. president in 2017, we likely hit a peak in globalization.

These structural trends are measured years and decades. The China-U.S. tech-driven battle started long before COVID-19 and Russia’s invasion of Ukraine ravaged the world’s supply chains.

We often get questions about getting growth into portfolios without the obvious (but expensive) technology sector. We have suggested that consumer and industrial cyclicals are good areas to consider, or companies that benefit from less globalization.

Under Biden, the CHIPS Act and the Inflation Reduction Act have led to meaningful increases in heavy industrial projects focused on computers, electric and onshoring of other manufacturing. This has accelerated infrastructure development.

A key company in the infrastructure building sector, Eagle Materials, commented in their earnings call last week:

"Our heavy materials performance this quarter continued to benefit from favorable business conditions. Public infrastructure spending is robust. The bulk of the United States investment in roads, bridges, highways comes from the state and local level and tax receipts continue to be strong, while state budgets remain healthy. In addition, increased infrastructure spending from the Federal IIJA funds should increase noticeably for the next several years."

For those looking for longer-term growth and are already very exposure to technology, the PAVE ETF might be something to consider. It’s not early, and it’s not cheap. But add PAVE to your “buy the dip” list if this week’s Federal Open Market Committee, QRA and other geopolitics trigger a market correction.

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