I’m about to show you 3 funds to buy for the raging bull market we’ll see in 2018.
You read that right. After a massive 22% gain in 2017, stocks still have room to run, no matter what the naysayers tell you.
Before we get to these 3 funds—with dividend yields up to 8%—I want to tell you why the negative Nellies are all washed up when it comes to the outlook for stocks this year.
Then we’re going to “pick our spots,” highlighting the 2 fastest-growing sectors of this surging market (both of which our 3 fund picks are dialed into) to grab the highest dividends and upside!
So let’s get started, with…
Why the Bull Will Keep Running in ’18
I don’t have to tell you that stocks have stormed out of the gate in 2018, with their fastest start to a year since 2003.
If you’ve been sitting on the sidelines over the past few weeks, wondering whether there’s still time to get in, don’t worry: there is. Because pretty much every important economic indicator tells us the US economy is strong, American companies are stronger and, as I wrote on January 8, stocks have only begun to price this boom in.
Let’s start with earnings growth.
In 2017, we saw earnings rise 9.6%, a meteoric acceleration from the near-flat profits of 2016. Analysts expect earnings growth to accelerate again, to a full 11.8%, through 2018.
Earnings Rev Up
Even better, earnings gains are nicely spread out across all sectors. But tech, financials, and materials will lead the way, with profit growth of at least 13% this year, according to estimates from FactSet.
What’s driving all these profit gains?
In 3 words: the American consumer.
The average US household’s net worth rose in 2017, and the resulting “wealth effect,” means Americans are more comfortable spending than they were last year. At the same time, as the following data from J.P. Morgan shows, the US household debt level has shrunk, leaving more room for spending:
Feeling Richer? You’re Not Alone
Then there’s the job market.
America’s unemployment rate is a historically very low 4.1%, and continuing jobless claims have stayed low, too.
Unemployment Low and Going Lower
There’s an even more exciting economic trend that most people aren’t paying attention to: the number of people in the workforce.
The “labor force participation rate” (LFPR) refers to the number of people who are willing and able to work as a percentage of the total population. The 2007-09 Great Recession destroyed this metric, bringing it to its lowest point since the 1970s.
And, on the surface, it looks like it isn’t getting better.
An Obliterated American Workforce?
But remember that this metric includes all Americans of all ages and that baby boomers are going through a wave of retirements that started in 2006, when the oldest boomers turned 60. The rate for Americans between 25 and 54 looks a lot better.
Youngsters Finally Back to Work
More Americans at work means more Americans can spend, which means higher sales and profits for US companies.
So how can we profit from this trend?
2 Sectors to Cash in on the New Economic Boom…
Let’s start with the younger folks we just discussed. What do they like to buy?
Obviously consumer discretionary items, such as clothes and movie tickets, are one possibility. You could get exposure to those companies through the Consumer Discretionary SPDR ETF (XLY).
Another important group, obviously, is technology.
Young people love gadgets, and gadgets are more ingrained in society than ever. So wealthier young people are great news for Apple (AAPL) and Amazon.com (AMZN).
These shoppers also help component makers like Nvidia (NVDA) and Intel (INTC), as well as software makers like Activision (ATVI) and Adobe (ADBE). Visa (V) and Mastercard (MA) will get a boost, too, as will Google (GOOG) and Facebook (FB), where consumer-goods makers advertise their products.
You can get all of those stocks with the Technology Sector SPDR (XLK), but I have a couple of better alternatives.
…And 3 High-Yield Funds Leading the Way
All 3 of the funds I’m about to show you are closed-end funds (CEFs) that are far from household names: the first two are tech funds: the BlackRock Science and Technology Trust (BST) and the Columbia Seligman Premium Tech Fund (STK).
Both pay attractive dividends, with BST yielding 5.5% and STK boasting a more impressive 8%. But which one is the better buy?
While STK’s high yield is impressive, there’s one important factor that puts BST ahead by a nose: its 2% discount to its net asset value (NAV, or what the fund’s underlying portfolio is worth). That’s a far better deal than STK, which trades at a 6.3% premium to NAV.
BST’s discount (and the upside it implies) makes it more appealing (and less risky) than the overvalued STK.
Beyond tech, you can get broad exposure to consumer stocks with Tri-Continental Corporation (TY), a CEF that’s been around since 1929!
This fund isn’t popular at all—its 10.7% discount to NAV is the seventh-widest among US stock CEFs tracked by my CEF Insider service. But the reason for that unpopularity is kind of silly: its low yield. With just 4.6% income to investors, TY’s dividend isn’t much bigger than the payouts on some high-yield stocks.
But that only means the market is far undervaluing this fund’s assets. Since TY’s portfolio will likely gain throughout 2018, its low-priced portfolio is particularly appealing right now.
Revealed: My Top 14 Funds to Buy Now (Life-Changing Yields Up to 9.5%)
These three funds are worthy of consideration for most folks’ portfolios, but my CEF Insider service recommends 14 off-the-radar funds I see as “must buys” for 2018—poised for fast double-digit gains and throwing off SAFE yields up to 9.5%!
All you have to do is CLICK HERE to get immediate access to this standout 14-fund portfolio with no risk and no obligation whatsoever.
That’s not all.
You’ll also get my latest FREE Special Report, which reveals my 4 “Best Buy” CEFs now.
These 4 “unicorns” boast 8.1% CASH payouts, on average! And thanks to their ridiculously cheap discounts, all 4 of these unsung CEFs are on the launchpad for 20%+ price gains in 2018!
Your Special Report, the entire CEF Insider portfolio and all the other benefits of membership are waiting for you now.
Don’t miss out. CLICK HERE to get instant access to the 14-fund CEF Insider portfolio and the complete service with no risk whatsoever!
Coming Soon: My Favorite US Equity Fund for a 10% Yield
My next CEF Insider pick—due out in the January 26, 2018, issue—owns a portfolio of top-notch US stocks, just like BST, STK and TY, but with one crucial difference that puts it well ahead of these 3: this new selection pays a massive 10% dividend yield, higher than any other fund in our CEF Insider portfolio!
I’m just finishing up my research on this low-key cash machine, and as I said, I’ll release it in the next issue of CEF Insider just 8 days from now, on January 26, 2018.
If you want to set yourself up for market-beating gains in 2018 (and who doesn’t?), I urge you to check out this under-the-radar fund. All you have to do is CLICK HERE NOW to make sure you get the name of this exclusive pick as soon as I release it.
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