Profit from the Pros
Happy New Year!
While the last trading day of the year last week was ho-hum, 2017 went out with a bang! The total return for the Dow Jones was up a whopping 28.11%, while the broader S&P 500 was up an impressive 21.83%.
While some were predicting doom and gloom last year, we were bullish every step of the way and it paid off handsomely.
As for 2018, I'm just as bullish, if not more so.
The tax cuts will go into effect almost immediately. Individuals will begin seeing more money in their paychecks come February. And corporate tax cuts were slashed from 35% to 21%, the lowest in 68 years.
The US has suddenly become one of the most business friendly countries in the world. And we should see massive new corporate investment to follow.
And given that 70% of our GDP is tied to consumer spending, putting more money into people's pockets will likely translate into more dollars spent.
We could see a bump in the road come January 19th, as the latest spending bill extension comes due yet again. Neither side seems willing to shut the government down. But the rhetoric did get ratcheted up last time, and is likely to escalate as the deadline approaches.
However, any spending bill volatility should be transitory in nature and would present a spectacular opportunity to buy any dip.
But DC nonsense aside, the market looks poised for another spectacular year.
For the record, the longest bull market in history was 12.3 years, which produced a 582% gain along the way.
The current bull market is now 8.9 years old, while the S&P has racked up over a 300% return.
I'm expecting this bull market to eclipse that record given all of the historic things taking place in our economy. That means I'm expecting this bull market to last AT LEAST another 3.4 years with plenty more gains to go.
Get ready because 2018 could very well be your best year yet.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
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