We are coming to the end of one of the great rollercoaster rides of all time - the calendar year 2017.
The onset of the Donald Trump presidency brought unprecedented growth in the stock market, an incomplete effort to overall the health care insurance program, and a destabilization of international relations with North Korea as well as with long-time marketing partners Mexico and Canada.
For investors, riding the stock market climb turned out to be widely beneficial. Investing in health care products was an uncertain plan. International trade, complicated by Brexit and the Paris climate accord, was a challenging market to consider.
We are set to turn the page of 2017 and enter 2018. What will it bring to consumers, investors, and the advisors who work with them?
Wouldn’t it be great if we knew?
Advisors will be challenged to determine just what is going on with our federal tax laws. The passage of a new tax bill is eminent, and President Trump has promised to sign whatever Congress sends him. It will affect nearly every investor in the country, and many will depend on their advisors to tell them just what affect it will have and how to take advantage of some of the more dramatic changes the new tax law provides.
Once the tax situation has been settled, President Trump has long promised to do something to benefit our nation’s aging infrastructure. Because it will require massive funding, there will be long-term arguments about how the nation is going to pay for the infrastructure bill that almost everyone agrees is necessary. With billions of dollars to be invested, advisors will need to keep a watchful eye on how that many will be distributed and determine how best to direct investors to take advantage with informed investment decisions about construction and real estate opportunities, as well as other points of future funding.
The stock market, meanwhile, reached all-time highs on almost a weekly basis. Dozens of records were broken in 2017, and many feel the new tax laws will create an even more robust stock market environment. But will 2018 bring the downturn that pessimistic observers predict?
Advisors do not want to blunt the enthusiasm investors have about investing in the stock market, but they would be wise to discuss with investors the possibility that the red-hot market will somehow cool off. The calendar year 2018 could be the one in which advisors prove their worth by assisting investors in maintaining their profits from 2017 should the stock market balance itself.
All of those financially motivated issues will be addressed, but they will be considered amid a backdrop of international intrigue. The continuing war of words with North Korea remains unresolved, and no one seems certain how it will turn out. There remains the fear that something military will take place, and if that happens, matters related to investments and finance may take a back seat.
Spectrem asks investors monthly how they feel about the hot topics of the day, and in November they were asked to rate their concern over five issues on a 0-to-100 scale. Among Millionaires with a net worth between $1 million and $5 million and Ultra High Net Worth investors with a net worth between $5 million and $25 million, the situation with North Korea took the top spot. Millionaires rated their concern at 67.14, and the UHNW investors went even higher, at 71.24.
That is a very high level of concern. For comparison, the UHNW investors rated their concern over at 58.05, and health care reform at 62.86. For UHNW Baby Boomers, concern over North Korea was rated at 73.1 and among World War II investors, concern reached 74.79.
Issues outside a financial purview might cause investors to lose focus on investment issues. While advisors cannot solve the North Korean matter, they can take their clients’ minds off of such concerns by proactively contacting investors to discuss financial matters, which might be a more cheerful subject.
If 2017 had a slogan, it might have been “Never a Dull Moment”. What will the slogan for 2018 be?