Will the Dow Jones Crash in 2018?

Even though the Dow is just one index of the broader stock market, the recent volatility on Wall Street has some investors worried about a potential Dow Jones crash in 2018.

The fear is certainly understandable, considering the Dow plummeted 1,000 points on Feb. 5 and another 1,000 points between March 21 and March 22.

Dow Jones crash

While the drops were contained, it was jolting enough for investors to wonder if a stock market crash, or even a stock market correction, could be on the horizon.

While we aren't predicting a stock market crash in 2018, what has happened in just the first quarter is enough to give even the most aggressive investor pause. Unfortunately, there could be more bad news on the way.

Again, we don't believe that a DJIA crash will be a reality, but there are a few bearish signs that we want our readers to be aware of.

And it's not too late to take action to protect your portfolio from the next market crash...

The Fed Is Stoking Fears of a Dow Jones Crash

The U.S. Federal Reserve has been hiking interest rates, with no plans of stopping. The Fed has hiked rates six times since December 2015, and it plans to hike rates another two times this year alone.

That's crucial, since the Fed's low interest rate policy is one of the reasons stocks have soared to record-high valuations.

When the Fed lowers interest rates, it's attempting to jumpstart the economy when it is struggling. Easing monetary policy makes borrowing cheaper, so a business can gain access to affordable cash to use for growth.

You Must Act Now: America is headed for an economic disaster bigger than anything since the Great Depression. If you lost out when the markets crashed in 2008, then you are going to want to see this special presentation...

This is one of the reasons for the drastic interest rate reductions during the Great Recession of 2008. Before the stock market crash, interest rates were over 5%, but the Fed slashed them to 0.25%, which was a historical low.

These low interest rates were effective to a point. Companies did borrow cash at a massive volume, but instead of expanding their businesses, they used the money for share buyback programs. In buying back their own shares, this boosted stock prices and shareholder value.

From 2009 through 2016, publicly traded companies bought back $2.1 trillion worth of shares and borrowed $1.9 trillion in cheap funds. These buyback programs are one of the catalysts for the 250% growth in the stock market.

And that sort of growth drove valuations to heights only seen before major economic disasters.

The Shiller P/E ratio measures the stock market's overall valuation, and it is now at 31.55, which is double its historical average. This ratio has only been higher before the dot-com bubble burst, and it's currently higher than it was in 1929, before the worst stock market crash on record.

This doesn't mean a stock market crash is coming, but it shows the Fed is tightening monetary policy just as stock valuations are reaching extreme highs.

And as volatility has nearly doubled this year amid the Dow Jones corrections and pullbacks, we want investors to be prepared for the possibilities ahead.

Here's how to protect your portfolio, and even profit, no matter what comes next...

How to Protect Your Money from a Dow Jones Crash

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We're recommending two stocks that have a track record of performing even as the broader market declines. Both of these stocks brought positive returns during the tech crash in 2000, even as the overall markets fell more than 10%.

While there's no guarantee these stocks will be immune to the next correction or pullback, they are some of the best companies in the most in-demand industries.

Money Morning Chief Investment Strategist Keith Fitz-Gerald thinks investors should hold on to stocks in the "Unstoppable Trends." The trick to making huge profits is to find "must-have" companies that fall into these six Unstoppable Trends: medicine, technology, demographics, scarcity and allocation, energy, and war, terrorism, and ugliness (also known as "defense"). The Unstoppable Trends are backed by trillions of dollars that Washington cannot derail, the Fed cannot meddle with, and Wall Street cannot hijack.

By owning well-run companies in these Unstoppable Trends, you'll own resilient stocks that will charge out of any market downturn, leaving behind anyone who sold off stocks for other assets. And if the market doesn't correct, these stocks are still going up.

That's why we're bringing you two of our favorite stocks from the Unstoppable Trends.

Raytheon Co. (NYSE: RTN) is our play for the trend of war, terrorism, and ugliness.

Raytheon is a leader in the defense industry, with billions in contracts with the U.S. government and other countries across the world. That means if the market falls, Raytheon is going to continue to excel over the long term.

Raytheon has billion-dollar contracts with the U.S. government, but it also has a diverse customer base. International customers make up just under half of its business. That means even if a few countries cut defense spending during an economic downturn, RTN still has plenty of other customers to help it weather the storm.

But RTN's real allure as an Unstoppable Trend pick is the fact that war is a reality of the world. For instance, as tensions rise abroad, the United States is more likely to need more weapons and equipment. When the United States launched a missile strike on a Syrian airbase on April 7, Raytheon's stock jumped more than 2%, since its missiles were used.

RTN currently trades at $227.76 a share and pays a 1.52% dividend yield.

Becton, Dickinson and Co. (NYSE: BDX) is an example of a play in the Unstoppable Trend of demographics.

BDX is a healthcare company specializing in one-time-use medical products utilized in hospitals and long-term care facilities. That means as populations age, more people will need this type of medical care, and BDX will be in even higher demand. People will need healthcare whether the market falls or not.

But BDX is also an exceptionally well-managed company. It has a 10.54% profit margin and maintains a 1.58% dividend yield, even after a $12.2 billion takeover of CareFusion two years ago. That means the company's capital management is sustainable and will easily survive a market downturn. And that's good news for its shareholders during a stock market crash.

BDX trades at $234.75 and pays a 1.28% dividend yield.

While these stocks are excellent plays, what we've revealed about the Fed is just the tip of the iceberg...

The Scary Details the Fed Didn't Reveal

On Feb. 27, Chair Jerome Powell revealed the Fed would raise interest rates.

What he didn't say is that those rate hikes could send the U.S. economy into a tailspin... and very well might lead to the greatest economic collapse since the Great Depression.

If you are not willing to lose everything in another market crash, then click here.

Because it's possible to protect yourself from the coming economic disaster - but you have to act now.

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