While there's major money to be made by correctly picking winners and losers, that can be the hardest thing to do with stocks.
The easiest, smartest, and most financially rewarding way to play stocks and markets is by riding trends.
That's because trends tend to have longevity, and various momentum boosters can drive them faster and further in the direction they're going. We see this with stocks that have been trending up since March 2009, including the momentum boost in 2017 that few investors saw coming – or believed – even as markets reached higher highs again and again.
There are a confluence of positives for markets that should continue to propel stocks higher in 2018.
Here's how to play 2018 markets to your advantage…
The 2018 Tax Cut Boost
On top of all the positives and momentum-driving factors propelling stocks higher, prospects for corporate tax cuts are only partially baked in.
Stocks will get a substantial boost in 2018 from enacted tax cuts.
Analysts estimate that the earnings per share for the S&P 500, projected to be $141 in 2018, will get an additional $10 per share boost if the top statutory rate is reduced from 35% to 21%.
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More importantly, big tech stocks that are leading benchmarks, ETFs, and all passive investment funds higher will be repatriating hundreds of billions of dollars from overseas accounts into the United States when the one-time, 15.5% repatriation tax rate draws hundreds of billions of dollars back home.
Some of that repatriated cash will go into R&D, and a lot more will go towards acquisitions. But tens of billions, per company, will go towards special dividends and massive share buyback programs, dwarfing all else. This will further boost the share prices of the biggest momentum stocks fueling indexes and passive investing funds higher.
There are more than a few stocks that are going to benefit from these trends. I expect a lot of merger and acquisition activity in 2018, especially in media, specifically for content and to generate scale.
My favorite media companies right now are…
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.