WWII 038: Investing Themes for 2017, Are Drone Companies Invest-able, Bond ETFs Will Fall
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It's a new year and time to look for major trends for the year that can play into your investment decisions.
Main Topic: Major Trends for 2017
- Rising Interest Rates - The Federal Reserve raised the Fed Funds Rate once in 2016 but are indicating three raises in 2017 to match with what the underlying economic data is saying. Banks and insurance companies should benefit from rising rates.
- Having been tame for the last ten years, there are indications that the fundamentals required for inflation to re-assert itself are now in place and this could be a major trend. Not a prediction, it just seems to be more possible now than in previous years.
- Millenials buying houses (Ages 20-36) - Millennials, whom we define as those ages 18-34 in 2015, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69). And Generation X (ages 35-50 in 2015) is projected to pass the Boomers in population by 2028. The Millennial generation continues to grow as young immigrants expand its ranks.
- Stronger dollar - Although the dollar has shown strength in recent years, your new president has made comments that the era of the "strong dollar policy" is over and the dollar should be allowed to weaken to make the U.S. exports more competitive. To many off-setting factors to make a trend call on this topic.
- Political Chaos - Definitely expect political chaos as the Republican led Congress attempt to unravel a bakers dozen of Obama policies.
- Lower taxes – Maybe not until 2018 as it will require an act of Congress.
- Recovery in GDP growth - The first three trends on this list should result in increased GDP overall and send the U.S. economy back to 2-3% growth again from the tepid less than 2% growth we have experienced over the last few years.
- Continued strength of US economy - Don't bet against the United States the land of freedom, democracy, and capitalism. Our economy is showing it's strength and there are plenty of domestic companies one can invest in.
Ask JB: Should One Invest in Drone Companies?
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