2017 started with the Dow hovering around an all-time high of 20,000. Some large companies are responding to the perception of an improved economic outlook by making plans to open or expand operations in the U.S. The healthcare industry is in limbo, no one knowing what will happen.
Outside the U.S., Brexit and key votes expected in Europe add more uncertainty for investors. China’s economic downturn may continue, but the Chinese government is taking steps to ensure that this downturn remains gradual until plans succeed in generating another upturn. In the U.S. and around the world, changes are coming.
How will all of this change – good or bad – affect the average investor on Main St.? Which investments should be dumped and which investment areas may be of particular interest in 2017? An investment advisor without ties to wall street may be able to offer the most unbiased advice as to investment trends in 2017.
- U.S. Equities: This may be a good time to invest a little heavier in U.S. equities. It’s anticipated that 2017 U.S. earnings will rise by over 8% because of stabilized oil prices, an accommodating monetary policy and perhaps a fiscal stimulus.
- Financials and Healthcare: These sectors are expected to benefit from fewer burdensome regulations.
- Tech: Cloud computing should continue to add impetus to the tech sector.
- Asia Pacific Real Estate: REITs in this region offer attractive yields when compared to average yields elsewhere.
- Emerging Market Currencies: Higher yields make it worth taking a hard look at the South African rand, the Indian rupee, the Russian ruble and the Brazilian real.
- High Quality U.S. Municipal Bonds: Even though U.S. taxes are expected to be lowered, many investors will still benefit from the tax benefits and yield enhancement of better U.S. municipals.
- Commodity-Related Investments: Master limited partnerships provide fairly attractive incomes for U.S. investors. Select those that will benefit from increased oil and gas production and infrastructure spending.
- Alternative Investments: Diversify with investments in private markets and hedge funds with returns that are not as dependent upon listed assets.
Investors need to pay increased attention to asset classes that aren’t as greatly affected by public policy. Continuing trends in technological innovation, an aging and growing population and the continuing urbanization of the U.S. will create investment opportunities. As has been said countless times, diversify your portfolio in order to both protect and grow your wealth.