“This is an aging bull market. A dip is coming.”
“This bubble market driven by the Fed is going to crash.”
“Trump is going to make the market crash.”
For most of 2016 and most of 2017, investors have been reading these types of headlines.
I’ve been telling readers that stocks were good business. And I told people that they should buy stocks instead of panicking and selling them.
My suggestion was to simply buy the SPDR Dow Jones Industrial Average ETF (NYSE: DIA).
If you were one of those who bought this exchange fund, it is now up 65%. Well done and congratulations! You deserve it because I know how difficult it can be to buy when markets are down.
It also took a lot of guts on his part to buy when most people told him to sell.
You have earned those gains with effort.
But now that buying stocks is no longer scary, you might be wondering if it’s time to cash in on your hard-earned earnings and sell it all.
Shares are certainly a more popular trade than in February 2016.
After all, the Dow Jones Industrial Average was up 28% in 2017 alone.
However, the big 2017 earnings mean there is a good chance the 2018 earnings will be lower. My best guess is something like 8-10%, maybe as high as 15%.
The way I come up with this estimate is by using my GoingUpness system. GoingUpness is the system I use to select actions.
The GoingUpness system is based on the potential demand and supply of stocks. GoingUpness focuses on the most important benefit of owning shares: the increase in the price of the shares.
After two years of profit, my GoingUpness system says that at higher prices there are fewer people who will go in to buy stocks than in 2016 or 2017. That also means that you will see some periods where some people charge and sell.
The bottom line: less demand and more supply means you’ll see smaller profits in 2018.
A focus on megatrends reveals the best stocks to invest in
However, for certain market segments, like the ones I focus on my paid services, I think we will see much higher returns.
The reason for this is that these stocks will experience greater growth. More growth means more demand for your shares and higher profits.
The reason for these advances, I think, is a focus on mega trends like the IoT, precision medicine, and the millennial generation.
And in 2018, we will add new trends:
- Financial or fintech technology (which includes the use of technologies such as blockchain, mobile payments, peer-to-peer loans, and artificial intelligence agents).
- New energy (including natural, sustainable, renewable energy, lithium and hydrogen based energy sources, and portable, storable and local sources).
This focus on megatrends is why I believe stocks will continue to perform better. And their contributions to market indices like the Dow and the S&P 500 are the reasons why I expect the market as a whole to keep going up.