Scott Bessent is buying US stocks with taxpayer cash amid China threat — can you copy and get rich? Here’s what he likes

Scott Bessent is buying US stocks with taxpayer cash amid China threat — can you copy and get rich? Here’s what he likes

Clay Halton

Tue, July 28, 2026 at 3:55 PM GMT+3 8 min read

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The U.S. government has invested billions of taxpayer dollars over the past year to acquire stakes in companies it believes are strategically important to competing with China. The investments span industries including semiconductors, rare earths, lithium and quantum computing, and represent a departure from traditional industrial policy, with Washington increasingly taking direct ownership stakes instead of relying primarily on grants, loans and tax incentives.

Treasury Secretary Scott Bessent explained the administration's reasoning during a CNBC interview (1) last year.

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"When you are facing a non-market economy like China, then you have to exercise industrial policy," Bessent said in October, 2025.

In late July, the federal government's largest and most prominent holdings include a ⁠9.9% stake in Intel (2) obtained through $11.1 billion in previously authorized funding and an approximately ⁠15% stake in MP Materials (3), which operates the only active rare earths mine in the U.S. Washington has also acquired stakes in Lithium Americas and its Thacker Pass project, Trilogy Metals, USA Rare Earth and several other businesses.

But back in 2025, Bessent cautioned that the government must be "very careful not to overreach" and should regularly examine whether each investment has accomplished its intended goal.

So, is it working?

The early results appear to be mixed. Government backing has helped attract attention to some companies, and the announcement of potential federal stakes produced immediate stock-market reactions for Lithium Americas, for example, whose stocks ⁠surged after reports emerged that Washington was considering an equity stake (4).

But rising share prices do not necessarily mean the broader strategy has succeeded. The ultimate test is whether these investments create durable U.S. supply chains and reduce dependence on China. Despite tens of billions of dollars in federal support for nearly 150 mineral companies, ⁠Reuters reported on July 27 (5) that domestic mining and refining capacity remains far short of what American manufacturers and defense contractors need.

That makes it too early to determine whether taxpayers will ultimately profit or whether the strategy will achieve its national-security goals. For investors, however, Washington's choices provide a clear indication of the companies and industries the administration considers strategically important.

Corporate earnings and interest rates remain important, but government policy, geopolitics and national security priorities are increasingly influencing where capital flows. Understanding those forces may become just as important as analyzing a company's balance sheet.

Stay ahead of policy-driven market shifts

Washington's investments may offer clues about which industries could receive favorable policies, federal contracts or additional financial support. But that doesn't mean every company operating in those sectors will prove to be a good investment.

Investors still need to examine factors such as a company's finances, competitive position and growth prospects before buying its shares. That can be difficult when government announcements can artificially inflate a stock's value, not to mention geopolitical developments and market reactions unfolding simultaneously.

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Their analysts spend hundreds of hours researching companies, industries and macroeconomic trends before publishing stock and crypto reports ⁠delivered straight to you. That research can help investors stay on top of changing market conditions while reducing some of the guesswork behind choosing stocks and ETFs.

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Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here's where their money is actually going

Turn market signals into a long-term plan

Spotting industries that could benefit from government support is only one part of building wealth. Deciding how much to invest, when to buy, how to manage risk and how those investments fit into your broader financial plan can be just as important.

That's one reason many investors turn to professional advice. Vanguard estimates that a skilled financial advisor can add up to about 3% in net annual value (6) through services such as portfolio construction, tax-efficient investing, behavioral coaching and retirement withdrawal planning. These are benefits that go well beyond picking winning stocks.

That expertise can be especially valuable for investors approaching retirement or already living off their portfolios, where decisions about taxes, withdrawals and portfolio risk may have a much bigger impact than finding the next hot stock.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

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From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.

Look beyond government-backed stocks

One takeaway from the government's growing involvement in the private sector is that public markets don't always move on company fundamentals alone.

Investors who concentrate heavily in companies dependent on a particular administration or policy agenda could therefore face additional risk if Washington's priorities change. Diversification cannot eliminate the possibility of losses, but the ⁠Securities and Exchange Commission says (7) spreading money across different investments and asset classes can help reduce risk.

For some investors, that means not only diversifying across different sectors, but also considering assets that don't necessarily move with the stock market. Fine art is one example. Although it comes with its own risks, including illiquidity, valuation challenges and fees, fine art has historically shown relatively low correlation with stocks, making it an alternative some investors use to broaden their portfolios.

In fact, more than 70,000 investors have gained exposure to works by artists like Banksy, Basquiat and Picasso through ⁠Masterworks, a platform that allows investors to purchase fractional shares of blue-chip artwork.

Masterworks has sold 31 artworks so far, producing net annualized returns such as 14.6%, 17.6% and 17.8%.*

For investors interested in exploring an alternative asset with historically low correlation to the stock market, Moneywise readers can receive priority access through Masterworks and ⁠skip the waitlist here.

*Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at ⁠ Masterworks.com/cd .

Build a portfolio that doesn't depend on Washington's next move

Whether Bessent's strategy ultimately succeeds remains an open question. Government support can lift certain industries, but policy priorities can change, and even government-backed companies aren't immune to market downturns.

That's one reason some investors own assets that don't always move in lockstep with stocks. Gold, for example, has historically behaved differently during periods of market stress. The World Gold Council says (8) gold has generally maintained a low correlation with equities and has often held its value better than many risk assets during major market selloffs.

While no investment is immune to losses, some investors choose to hold physical gold as a way to help cushion their portfolios during periods of heightened geopolitical uncertainty, inflation or stock-market volatility.

If you're curious about adding precious metals to your broader inflation-hedging strategy, a gold IRA from Goldco lets you hold physical gold and other metals while still getting the tax advantages of an IRA.

Goldco is widely regarded as one of the leading companies in the space, with a 4.8/5 rating on Trustpilot and an A+ from the Better Business Bureau. They also offer a guaranteed buyback program, meaning they'll repurchase your metals at the "highest price" according to market value if you ever decide to sell.

If you want to explore whether precious metals could be a helpful hedge for your portfolio, you can download Goldco's free gold and silver guide to see if it's a good fit for you. Plus, the company will match up to 10% of qualified purchases in free silver if you decide to buy in.

Just keep in mind that, like any investment, precious metals carry risks and shouldn't be viewed as a replacement for a diversified portfolio. Instead, many investors consider them one component of a broader long-term strategy designed to help navigate periods of inflation, geopolitical uncertainty and market volatility.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.