2018 is off to a roaring start. The long anticipated corporate tax break is here, and Wall Street is celebrating. That makes sense, for lower taxes will have an immediate impact on corporate bottom lines. The great hope is that they will allow for companies to hire more people at higher wages, and for the time being, that appears to be exactly what’s happening. Jobless claims continue to fall, unemployment remains low and there has been some rise in wages, if not quite what we might have expected or hoped for.
On the other hand, the fact that wages still have a ways to rise demonstrate something interesting: we are only now entering a period of economic prosperity, which means we could have years to go in this economic cycle. So how does that square with the lofty valuations in the stock market? Well, the market will square it in its own time with a simple correction, but this is nothing to fear, given that corrections don’t cause too many problems if the economy’s fundamentals remain strong. We could see a 30% correction in 2018 and still see the S&P advance 30% or more over the course of the year.
In other words, if you like a stock—and there are so many to like—it is, yes, a very fine time to buy. Here are a few that may have evaded your notice up until now. Remember to treat these ideas as just that, ideas, and do your own research before making any investment decision.