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How I’m investing in 2017. Don’t believe the doubters!

I’m back! Yep and this might ‘surprise’ you but I’m expecting another positive year for the economy and stocks. Sure, there will be moments when we cop some dramatic daily doses of stock market volatility but it’s not hard to argue that we look poised for higher share prices over 2017.

One of the big challenges will be that we have copped a lot of my expected positivity for this year in the space of two months, since Donald Trump shocked the USA and the world with a surprise win in the November 8 election. And then his surprisingly “presidential” victory speech, which helped turn around market sentiment towards what a Trump era might mean, added to positivity for stock prices.

Let me list the reasons for being optimistic for the economy and stocks. Here goes:

I rest my case on why I have a positive view on the economic and stocks’ stories but here’s what I’m worried about:

So how am I investing?

Last year I liked the big miners when they were belted up and the banks along with other big cap company stocks. I also liked the overall index and I bet ETF players did too, if, say, they bought the ASX 200 index at 4,707 for a 22% gain!

This year I’m not dumping the big caps but the upside will probably be restrained, so I’m looking for smaller companies that have a good business model and especially if they also have a good history for paying dividends, which actually grow.

I think we’ll see 6,000 on the S&P/ASX 200 index and the next target is 6,300, which is only 9.4% away.

I don’t think the bull market is dead yet and history says we beat the old market index high before stocks head back into crash territory. Donald T could bring forward the timing of the next crash but I doubt whether he’ll manage it in one year. Hillary Clinton would not have excited markets and so the rise in stock prices would’ve been slower and therefore crash time might have been a lot further away than with Donald.

As many of you know I like the observations of Sir John Templeton who told us: “Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria.”

Even the USA is not in the euphoria phase yet and I suspect Congress and the realities of politics will slow up the arrival of this pumping up of market positivity, which means we have time to build a bit of wealth.

Happy New Year to all of you and my team and I will be working on making it a happy one for you for most of the months ahead. Of course, there will be some mad moments and my few critics who have gone silent recently, will re-emerge from their secluded negativity to give me another lesson. That’s what goes with the patch.

Like most years since March 2009, I suspect 2017 will bring more good news than bad and the doomsday merchants will again be silenced. One year they will be right but I doubt whether it will be this one.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.