So it looks like Santa has extended his stay and is now delivering presents in January. It’s very hard not to think about it in those terms given the overwhelmingly positive start to 2018. US markets have had a fiery start, though the current gains we are seeing have come from the latter part of December.
But what are we looking at exactly? The S&P 500 is now up 306% without taking dividends into account. In real and reflective terms, this pegs the S&P 500 as a monster rumbling along, something akin to the massive run made back in 1987.
That major run lasted a whopping 13 years and much of the huge windfalls that were made leading up to -08 crash were generated, in part thanks to that massive rally.
Naturally investors and analysts are rubbing their hands. The hope being whispered along the trading and investing corridors is that the markets will now explode into a new paradigm of profits and prosperity.
The start of 2018 has certainly given enough evidence to suggest that those who stay with the markets this year will be in for something. Much of how things turn out will depend on the wider macro-factors; still, things are shaping up nicely.
There are a few side issues that require some awareness though. Chief among those issues is the cryptocurrency craze.
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Bitcoin has led the way in terms of cryptocurrency awareness, but the whole thing has become one crazy train ride. Aside from Bitcoin, a whole host of other currencies are vying for attention and in many cases, getting it.
Take Ripple for instance. That digital currency as of this writing has dropped more than 40% in the past couple of days. Bitcoin is also coming under pressure and as of this writing is hovering just above the $14,000 level.
At this point it is unclear where digital currencies are going to end up. Block chain, the underlying technology supporting the proliferation of currencies, seems legit and stable enough to survive the topsy-turvy markets for individual currencies.
The big question, then, is what an investor should do. My own thinking, and this is an evolving scenario, is that investors should stage their investing sights on the underlying technology and those peripheral technologies that tie into it.
Chipmakers like Intel and AMD are a go; so too are the companies that help facilitate network transfer of block chain data. Companies that make the powerful computers needed to mine Bitcoin and other currencies also present credible upside opportunities.
Digital currencies, no matter the volatility, will definitely impact any bull market that emerges and sustains itself in 2018 and beyond. The smart thing to do then is keep an eye on things.
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And of course we can’t ignore the bigger impact of policy on how the markets perform. This means investors can no more ignore Trump than they can carrying an umbrella when it rains.
Like it or not, Trump and what he does will play a major role in market outcomes. He’s already signaled from this first year in office that the markets are a big priority.
That, plus the commitment to strengthening the economy and making America great again, will potentially deliver trading and investing profits. 2018 will be interesting and you should be ready to take advantage of opportunities that arise.
There will be more to come as things develop so get ready to act on an
any opportunities sent your way.
– Michael The Dork Taylor
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