Wall Street Journal Weekend Edition (March 24-25, 2018) says, “Stocks sink to worst week in years!”
In today’s video, founder and president, David Wilson, talks about three reasons why you should not be spooked by the stock market.
It was an ugly week last week, and it’s been an ugly start to 2018, Here are 3 reasons why you should still be positive:
#1: Tax Cuts
We remain very bullish on stocks. The primary reason is the new tax legislation and deregulation. When John F. Kennedy cut taxes, the economy grew at a 5% rate after those taxes were cut. In 1983, when the Ronald Reagan tax cuts went into effect, the economy grew at an 8% rate.
The tax cuts are unleashing the animal spirits in businesses. Businesses are willing to take risk. They’re hiring more. And that is going to get the economy growing much, much faster. It sets the stage for continued growth, both in 2018 and ’19.
#2: Global Synchronized Growth
The second reason we’re still very positive on stocks is the synchronized growth that we’re seeing around the world. We’re looking at 4% growth this year and 4% next year. And virtually every country in the world, with the exception of three or four, are growing!
That’s helping U.S. companies that sell overseas, and it’s just creating additional growth around the world.
#3: Earnings, baby!
The third reason we’re still positive on stocks is earnings. Earnings are expected to grow 17% in the first quarter of 2018, and double digits the rest of the year. That’ll be the highest growth rate in earnings we’ve seen since 2011.
In summary, we’re positive on stocks because of the new tax legislation, synchronized growth around the world, and double-digit earnings growth, so stay the course.
