Businesses advised to adopt wait-and-see approach in wake of election

Businesses should take a wait-and-see approach to prepare for potential changes to federal policies, but investors have a few signals in deciding which direction they want to go, Chad Oviatt, chair of Nevada State Bank’s investment committee, told business owners and others Thursday.

“You need to sit back, be rational and objective about your individual situation and how you invest and why you invest,” he said.

Certain sectors will benefit from a Republican-led country, he said, which investors can use as a roadmap.

Oviatt made the comments to about 150 attendees at the Four Seasons during a panel discussion about what to expect following the presidential and state elections.

The financial industry, for example, could see a rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and pricing pressure may be eased for the pharmaceutical industry.

“When you have pricing pressures, that’s bad for the overall business, at least from a stock investor’s perspective,” Oviatt said. “Energy names are doing well. We have some infrastructure names doing well.”

President-elect Donald Trump’s calls for infrastructure spending, for example, are boosting industries that serve the construction sector.

“You want to try to think about investing in where the money is going on,” Oviatt said. “Think of where the investment dollars from a government standpoint or a corporate standpoint are going and try to get to that point.”

He said it is important that investors don’t get caught up in the emotional current that drove the election.

“If you start to trade or make changes to your investment portfolio based on emotion, or what you believe are potential outcomes, instead of using facts and concrete evidence, you have a risk of underperforming,” Oviatt said.

Jeremy Aguero, a principal analyst with Applied Analysis, suggested general business owners ought to brace for possible federal changes to health care, “which has been a significant issue for business folks.” He also said to anticipate tax cuts.

The combination of changing federal policies with impending changes to state policies are “critically important,” he said. “What’s going to happen as we bring recreational marijuana?”

Aguero told attendees the legalization of recreational marijuana could mean a business opportunity as well as an uptick in tax revenues.

Voters also approved a change to the state constitution to allow the state’s energy market to be opened to competition, giving consumers a choice of where they buy power.

“This, I believe, will be the single largest question before the Nevada State Legislature when they get together the first week in February,” Aguero said.

Aguero said the ballot approval of Question 5, calling for a 10-year extension of the fuel revenue index tax that took effect in 2013, will mean about 300 construction projects, such as road improvements, that will create more road assets in Southern Nevada.

“It’s also going to mean that those ridiculous orange cones that are on every single roadway in the entire community are going to be there for a while,” he joked.

Dallas Haun, chief executive officer of Nevada State Bank, said the event was planned three months before the election results “so in either event our clients would understand how it could potentially impact them.”

Terry Shirey, the bank’s chief operating officer, told the crowd “we know there’s a lot of interest right now in what’s going on.” After the election results were announced, he noted the forum had no trouble securing RSVPs.

Contact Nicole Raz at nraz@reviewjournal.com or 702-380-4512. Follow @JournalistNikki on Twitter.