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%.
Don't Miss Out: The Treasury is sitting on an $11.1 billion cash pile, and a loophole entitles Americans to a sizable portion. Some are collecting $1,795, $3,000, or $5,000 every month thanks to this powerful investment…
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 boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.