Why defense stocks

The U.S. Senate approved a $858 billion defense spending budget last week. This is a record high as defense spending has been on the rise since 2015.

It is not difficult to guess who the Americans see as the biggest threat to the world order.

China has been building up its military and budget was also on the rise each year.

On this note, China is still spending way less than the U.S. In 2020, China spent $252.3 billion or 1.75% of its GDP while the U.S. spent $778.23 billion or 3.74% of its GDP.

Military capability has to rise in tandem with the strength of the economy - because the country has more wealth to protect.