How to make your portfolio Trump-proof

Bilaal Mohamed reveals two blue-chip shares that should be immune to any political or economic upheavals in the months and years ahead.

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For those of you who’ve just woken up from a coma and are seeking no-nonsense investment guidance, then you’ve come to the right place. But if you’ve just heard that Donald Trump is to be the next president of the US and you’re wondering if it’s April Fool’s Day, then you’d be wrong. It’s Tuesday 15 November, one week after the US elections, and indeed Donald Trump will be the next leader of the free world.

Stock market collapse?

You will, of course, want to check on your portfolio which, if you bought wisely will be cheery enough to take the edge off the coming days and weeks when friends and relatives tell you the self-styled man-of-the-people and billionaire, won with fewer votes than Mrs Clinton, all hail democracy. You’ll be shown highlights of a colourful election campaign, featuring divisive rhetoric, interesting views on women, foreigners, and so on and so forth, and you’ll hear commentators predicting everything from a stock market collapse to Armageddon.

You may also see Trump supporters waving banners about reclaiming their country, although I’m sure Native Americans may have their own view on that. But before you completely lose your faith in humanity, and sell your shares in a blind panic, let me ask you a question. When was the last time a politician fulfilled all his/her election promises?

Invest in what you know

These are uncertain times and the more uncertain they get, then the more reliable defensives like  Reckitt Benckiser (LSE: RB) and Bunzl (LSE: BNZL) look very appealing. So how uncertain is it really? Well, already at the weekend the President-elect seemed to perform a U-turn on a giant campaign promise, to repeal ObamaCare, and instead will tinker with the Affordable Care Act that is hated by Republicans. I’m sure there will be further election U-turns and back again down the road.

If you’re worried about trade agreements, interest rates, the oil price, the value of the pound, and how they might impact on your portfolio, then I would suggest you sit tight, and invest in what you know, especially if what you know has strong defensive qualities. If interest rates rise, will people stop buying Nurofen or Gaviscon? If we have to negotiate new trade agreements will people stop buying Cillit Bang or Dettol? If the value of sterling sinks further, will orders for food packaging and hygiene products take a dive? I think not.

Buy and forget

Reckitt Benckiser  and Bunzl do all of these things between them. They’re two companies that most people have never heard of, and yet provide the products I’ve listed above plus many more well-known brands of consumables to a rapidly expanding worldwide market. Both Reckitt and Bunzl are low-risk defensive stocks providing everyday essentials to consumers who will buy them over and over again no matter what the political or economic landscape.

In fact, both firms have been expanding their global operations steadily over many years, and all the while rewarding their shareholders with rising dividend payouts, and indeed a rising share price. If you’re looking for buy-and-forget investments to park your hard-earned cash, then look no further than these two boring builders of wealth. I predict your portfolio will come up Trumps.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Reckitt Benckiser. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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