What Stocks Should I Invest In 2018

(Many of the links in this article redirect to a specific reviewed product. Your purchase of these products through affiliate links helps to generate commission for LiveWell, at no extra cost. Learn more)

Introduction

Welcome to the world of stock investing in 2018. With the economy showing signs of recovery and markets experiencing fluctuations, many investors are wondering where to invest their hard-earned money. The stock market can be a complex and volatile place, so it’s important to have a clear understanding of the factors that can influence your investment decisions. In this article, we will explore the economic outlook for 2018 and discuss the sectors and specific stocks that show promise for the year ahead.

The year 2017 was a strong one for stock investors, with major indices hitting record highs. However, as we enter 2018, there are several factors that could impact market performance. These include the policies of the new administration, geopolitical tensions, changes in interest rates, and global economic conditions. It is essential to stay informed about these factors and their potential impact on the stock market.

Before diving into specific sectors and stocks, it’s important to consider your investment goals and risk tolerance. Are you looking for growth potential, steady income, or a combination of both? Are you comfortable with higher risk and volatility, or do you prefer more stable investments? Understanding these factors will help guide your investment decisions and ensure that you are investing in assets that align with your financial objectives.

In the next sections, we will explore some of the top-performing sectors, blue-chip stocks, growth stocks, dividend stocks, emerging market opportunities, technology stocks, and healthcare stocks to watch in 2018. By considering these options, you can strategically diversify your investment portfolio and potentially reap the benefits of a well-planned investment strategy.

Economic Outlook for 2018

The global economy is expected to continue its growth trajectory in 2018, with many developed and emerging markets demonstrating positive indicators. The International Monetary Fund (IMF) projects a global growth rate of 3.9% for the year, fueled by strong momentum in major economies such as the United States, China, and Eurozone countries.

In the United States, the economy is expected to benefit from loosened regulations and tax reform implemented by the Trump administration. These measures are anticipated to stimulate business investments, boost consumer spending, and promote job growth. Additionally, the Federal Reserve’s cautious approach to raising interest rates is expected to support the stock market and maintain economic stability.

China, the world’s second-largest economy, continues on its growth path. The government’s focus on transitioning the economy from investment-driven to consumption-driven has resulted in increased domestic consumption and a more sustainable growth model. Emerging markets in Asia, such as India and Southeast Asian countries, are also expected to experience robust economic growth, driven by rising consumer demand and structural reforms.

While the outlook for the global economy appears positive, there are potential risks and challenges to consider. Geopolitical tensions, including trade disputes and political uncertainties, have the potential to disrupt markets and impact investor confidence. Additionally, the normalization of monetary policies, particularly in the United States, could lead to increased volatility in financial markets.

Overall, it is important for investors to closely monitor economic indicators and stay updated on geopolitical developments that could impact markets. By staying informed and adaptable, investors can make well-informed decisions and navigate the ever-changing landscape of the global economy in 2018.

Factors to Consider Before Investing

Before diving into the world of stock investing, it is crucial to consider various factors that can affect your investment decisions. These factors will help you make informed choices and align your investments with your financial goals and risk tolerance. Here are some key factors to consider:

1. Time Horizon: One of the first factors to consider is your time horizon. Are you investing for the short-term or the long-term? Short-term investments are typically more volatile, while long-term investments have the potential for higher returns but also come with a higher level of risk. Determining your time horizon will help you choose the right investment strategy.
2. Risk Tolerance: Every investor has a different tolerance for risk. Some are comfortable with higher levels of risk and volatility in pursuit of potentially higher returns, while others prefer more stable and low-risk investments. Understanding your risk tolerance will guide you in selecting the right blend of investments that align with your comfort level.
3. Financial Goals: Clearly defining your financial goals is essential. Are you investing for retirement, purchasing a home, or funding a child’s education? Understanding your goals will help you allocate your investments appropriately and make decisions that will bring you closer to achieving those objectives.
4. Diversification: Diversification is a key strategy for reducing risk. By investing in a mix of different asset classes, sectors, and geographic regions, you can spread your risk and potentially offset losses in one area with gains in another. Diversification is a powerful tool to protect your investments from potential downturns in specific sectors or industries.
5. Market Research and Analysis: Conducting thorough research and analysis is crucial before making any investment decisions. This involves researching individual companies, analyzing financial statements, exploring industry trends, and staying updated on market news and economic indicators. This information will guide your decision-making process and help you identify potential investment opportunities.

Remember, investing in the stock market involves certain risks, and there are no guaranteed returns. However, by carefully considering these factors and staying informed, you can position yourself for long-term success and make investment decisions that align with your financial goals and risk tolerance.

Top Performing Sectors

When it comes to investing in stocks, it is important to keep an eye on the sectors that are performing well. These sectors tend to benefit from favorable market conditions or specific industry trends, which can lead to potential growth opportunities. Here are some top performing sectors to consider in 2018:

1. Technology: The technology sector continues to thrive, driven by innovation and advancements in areas such as artificial intelligence, cloud computing, and cybersecurity. Tech giants like Apple, Amazon, and Microsoft have demonstrated strong growth and remain dominant players in the industry. Investing in technology companies can provide exposure to cutting-edge technologies and potential for significant returns.
2. Healthcare: The healthcare sector is another promising area for investment. With an aging population and growing demand for healthcare services, companies in the pharmaceutical, biotechnology, and medical device industries are positioned for growth. As medical innovations continue to advance, investing in healthcare stocks can offer both stability and potential for long-term growth.
3. Consumer Discretionary: The consumer discretionary sector encompasses industries related to non-essential goods and services, such as retail, entertainment, and travel. With rising consumer confidence and spending, companies in this sector have the potential for increased revenues. Strong retail brands like Nike, Starbucks, and Walt Disney Company are worth considering for investment.
4. Financial Services: The financial services sector, including banking, insurance, and asset management, has shown resilience and stability. The gradual rise in interest rates and improved economic conditions bode well for financial institutions. Investing in well-established banks and insurance companies can provide opportunities for both growth and dividend income.
5. Clean Energy: As the world moves towards more sustainable and eco-friendly solutions, the clean energy sector is gaining momentum. Companies involved in renewable energy, such as solar, wind, and electric vehicles, are attracting significant investments. Investing in clean energy not only supports a greener future but can also offer attractive returns as the sector continues to expand.

It is important to note that while these sectors have shown strong performance, it is vital to conduct thorough research and analysis before making any investment decisions. Consider factors such as company fundamentals, industry trends, and market conditions to make informed investment choices. Diversifying your portfolio across multiple sectors can help mitigate risk and maximize potential returns.

Blue-Chip Stocks to Consider

Blue-chip stocks are shares of well-established companies with a history of stable earnings, strong balance sheets, and a reputation for reliability. These stocks are generally considered to be less risky and can provide investors with a sense of stability and consistent growth. Here are some blue-chip stocks that you may want to consider for your portfolio:

1. Apple Inc. (AAPL): As one of the world’s largest technology companies, Apple has a proven track record of innovation and success. With its diverse product offerings and loyal customer base, Apple continues to dominate the consumer electronics industry. The company’s strong financials and focus on expanding its services division make it an attractive investment option.
2. Johnson & Johnson (JNJ): Known for its pharmaceuticals, medical devices, and consumer healthcare products, Johnson & Johnson is a global leader in the healthcare industry. The company’s commitment to research and development, coupled with its diversified product portfolio, provide stability and growth potential.
3. The Coca-Cola Company (KO): As one of the world’s most recognized beverage brands, Coca-Cola has a strong global presence and a history of consistent revenue growth. Despite changing consumer preferences towards healthier alternatives, the company’s brand recognition and wide distribution network position it well for long-term success.
4. Procter & Gamble Co. (PG): Procter & Gamble is a multinational consumer goods company with a wide range of popular brands such as Tide, Gillette, and Pampers. With a strong focus on innovation and a diversified product portfolio, the company has weathered economic downturns and maintained stable growth over the years.
5. Microsoft Corporation (MSFT): Microsoft is a leading technology company that has successfully evolved from a software provider to a cloud computing and digital services powerhouse. With its strong presence in enterprise solutions and a growing presence in the consumer market, Microsoft offers investors a solid investment option in the technology sector.

When considering blue-chip stocks, it is important to conduct thorough research and analysis. Factors such as company financials, growth prospects, and industry trends should be evaluated to make informed investment decisions. Additionally, it is beneficial to diversify your portfolio by investing in a mix of blue-chip stocks from different industries to further mitigate risk.

Growth Stocks with Potential

Growth stocks are shares of companies that are expected to experience above-average growth in earnings and revenue. Investing in growth stocks can be exciting and potentially rewarding, as they offer the opportunity for substantial capital appreciation. Here are some growth stocks with significant potential to consider for your investment portfolio:

1. Amazon.com Inc. (AMZN): As the largest online retailer in the world, Amazon has consistently demonstrated impressive growth. With its expanding e-commerce business, cloud computing services, and ventures into new markets such as healthcare and grocery, Amazon continues to disrupt industries and capitalize on changing consumer behaviors.
2. Tesla Inc. (TSLA): Tesla, an innovative electric vehicle manufacturer, has revolutionized the automotive industry. With a focus on sustainable transportation and advancements in battery technology, Tesla has the potential to dominate the future of electric vehicles. The company’s ambitious growth plans and ongoing investments in research and development make it an attractive growth stock.
3. Alphabet Inc. (GOOGL): As the parent company of Google, Alphabet is a global leader in internet-related services and technology. With its dominant search engine, advertising platforms, and rapidly growing cloud services, Alphabet is well positioned to benefit from the ongoing shift towards digitalization and online advertising.
4. Netflix Inc. (NFLX): As the pioneer of streaming services, Netflix has experienced remarkable growth in recent years. The company continues to invest heavily in content creation, expanding its global subscriber base, and innovating in the streaming space. With its vast library of original content and a strong foothold in the entertainment industry, Netflix has significant growth potential.
5. PayPal Holdings Inc. (PYPL): As a leading digital payments company, PayPal has been at the forefront of the shift towards cashless transactions. With the increasing popularity of online shopping and digital wallets, PayPal is well positioned to capitalize on the evolving payment landscape. The company’s strong financials and strategic partnerships make it an attractive growth stock.

It is important to note that growth stocks can be more volatile and may carry higher risk compared to more established companies. It is crucial to conduct thorough research and analysis, considering factors such as company financials, growth prospects, industry trends, and competitive landscape before making investment decisions. Diversifying your portfolio and having a long-term perspective can help mitigate risks associated with individual growth stocks.

Dividend Stocks for Income Investors

Dividend stocks are shares of companies that distribute a portion of their profits to shareholders in the form of regular dividend payments. These stocks can be an attractive option for income investors, providing a consistent source of passive income. Here are some dividend stocks worth considering for your investment portfolio:

1. Johnson & Johnson (JNJ): With a long history of increasing dividend payouts, Johnson & Johnson is a reliable choice for income investors. As a leading healthcare company, it generates stable cash flows, allowing it to consistently reward shareholders with dividends.
2. Procter & Gamble Co. (PG): Procter & Gamble is a consumer goods company that offers a wide range of household brands. With a solid track record of dividend payments and consistent earnings growth, it is a preferred choice for income investors looking for stability.
3. AT&T Inc. (T): As one of the largest telecommunications companies in the world, AT&T is known for its generous dividend payouts. With its strong cash flows from telecom services and media assets, AT&T has a history of providing reliable income to shareholders.
4. Exxon Mobil Corporation (XOM): As an integrated energy company, Exxon Mobil has a strong track record of paying dividends even during challenging market conditions. The company’s diversified operations and global presence make it a reliable choice for income investors seeking exposure to the energy sector.
5. Verizon Communications Inc. (VZ): Verizon is a leading telecommunications company known for its strong dividend yield. With its stable and cash-generating business model in the wireless and broadband industries, Verizon offers consistent dividend income to investors.

When considering dividend stocks, it is important to analyze factors such as dividend yield, payout ratio, dividend growth history, and the company’s financial health. Pay attention to sectors that historically have companies known for steady dividend payments, such as consumer staples, healthcare, telecommunications, and utilities. Diversifying your portfolio with a mix of dividend stocks from different industries can provide a stable income stream and potential capital appreciation.

It is worth noting that dividend payments are not guaranteed, and companies may choose to reduce or suspend dividends in adverse economic conditions. Therefore, conducting thorough research and staying updated on the company’s financial performance and industry trends are essential for income investors.

Emerging Market Opportunities

Investing in emerging markets can offer opportunities for growth and diversification. Emerging markets are characterized by rapidly expanding economies, increasing consumer spending, and a growing middle class. Here are some emerging market opportunities to consider when building your investment portfolio:

1. China: As the world’s second-largest economy, China continues to be a dominant player in the global market. The country’s ongoing economic reforms, technological advancements, and increasing consumer demand make it an attractive investment destination. Consider sectors such as e-commerce, technology, healthcare, and consumer goods for potential opportunities.
2. India: With a young and growing population, India offers immense potential for investors. The country’s economic reforms, digital transformation, and infrastructure development initiatives create opportunities in sectors such as technology, finance, healthcare, and renewable energy. The rising middle class and increasing urbanization contribute to India’s long-term growth prospects.
3. Southeast Asia: Emerging markets in Southeast Asia, including countries like Indonesia, Vietnam, Thailand, and Malaysia, show promise for investors. These economies benefit from favorable demographics, rising disposable incomes, and expanding consumer markets. Consider sectors such as manufacturing, infrastructure, consumer goods, and tourism for potential investment opportunities.
4. Brazil: Brazil, the largest economy in Latin America, offers opportunities for investors seeking exposure to emerging markets. The country’s rich natural resources, agricultural sector, and growing middle class create potential investment prospects. Sectors such as energy, infrastructure, financial services, and technology show promise in Brazil.
5. Africa: Africa is a diverse continent with numerous untapped opportunities. With a growing population, improving infrastructure, and increasing foreign investment, Africa offers potential in sectors such as telecommunications, banking, agriculture, and renewable energy. However, investing in Africa requires careful evaluation of specific countries and understanding the associated risks and challenges.

Investing in emerging markets can be rewarding but also carries risks such as political instability, regulatory challenges, and currency fluctuations. Conduct thorough research on specific countries and sectors, consider the local business environment, and stay informed about geopolitical developments to make well-informed investment decisions. Diversifying your portfolio across different emerging markets and sectors can help mitigate risks and potentially yield favorable returns.

Technology Stocks to Watch

The technology sector continues to be at the forefront of innovation and presents exciting investment opportunities. Here are some technology stocks worth watching for potential growth and profitability in the coming years:

1. Apple Inc. (AAPL): As one of the world’s largest technology companies, Apple remains a powerhouse in the industry. With its diverse product portfolio, including iPhones, Macs, and wearable devices, Apple benefits from a loyal customer base and strong brand recognition. Investors should keep an eye on Apple’s continued innovation and expansion into services such as Apple Music and Apple TV+.
2. Amazon.com Inc. (AMZN): With its dominance in e-commerce and cloud computing, Amazon has a track record of disrupting industries. The company’s growing presence in sectors like entertainment streaming and artificial intelligence through Amazon Prime Video and Alexa further demonstrates its potential. Investors should watch for Amazon’s continued expansion into new markets and its focus on enhancing customer experiences.
3. Microsoft Corporation (MSFT): Microsoft has successfully transformed from a software company to a major player in cloud computing and digital services. Its flagship products, such as the Windows operating system and Office suite, continue to generate substantial revenue. Investors should monitor Microsoft’s advancements in artificial intelligence, cloud computing, and its potential for growth in enterprise solutions.
4. Nvidia Corporation (NVDA): Nvidia is a leading semiconductor company specializing in graphics processing units (GPUs) that power various applications, including gaming, artificial intelligence, and data centers. The increasing demand for GPUs in emerging technologies positions Nvidia for continued growth. Investors should pay attention to Nvidia’s expansion into new markets and its leadership in autonomous driving technology.
5. Alphabet Inc. (GOOGL): As the parent company of Google, Alphabet is a dominant force in internet-related services and technology. Google’s search engine, advertising platforms, and the development of innovative technologies like self-driving cars (through Waymo) and smart devices (through Google Nest) contribute to its growth potential. Investors should monitor Alphabet’s ability to monetize its diverse portfolio and capitalize on emerging trends.

While these technology stocks present exciting opportunities, investors should carefully analyze factors such as financial performance, competitive landscape, and industry trends before making investment decisions. It is important to consider each company’s ability to innovate, adapt to changing market conditions, and generate sustainable revenue. Diversifying your technology holdings across multiple stocks can help mitigate risk and capture potential growth opportunities in this dynamic sector.

Healthcare Stocks with Growth Potential

The healthcare sector offers significant growth potential for investors, driven by factors such as technological advancements, an aging population, and increasing healthcare spending. Here are some healthcare stocks worth considering for their growth potential:

1. Johnson & Johnson (JNJ): As a diversified healthcare company, Johnson & Johnson has a strong track record of growth and a wide range of products across the pharmaceutical, medical devices, and consumer healthcare sectors. With its robust pipeline of innovative drugs and medical technologies, the company is well-positioned for long-term growth.
2. UnitedHealth Group Inc. (UNH): UnitedHealth Group is a leading health insurance provider and healthcare services company. With its vast network of healthcare professionals and innovative programs, the company is poised for growth as healthcare systems transition towards value-based care models. UnitedHealth Group’s strong financials and strategic acquisitions contribute to its growth potential.
3. Thermo Fisher Scientific Inc. (TMO): Thermo Fisher Scientific is a global leader in providing scientific research tools and laboratory equipment. The company’s comprehensive product portfolio and focus on research and development make it an essential player in the life sciences and healthcare industry. Thermo Fisher’s expansion into emerging markets and the increasing demand for precision medicine present growth opportunities.
4. Bristol-Myers Squibb Company (BMY): Bristol-Myers Squibb is a pharmaceutical company that develops and markets drugs for various therapeutic areas, including oncology and immunology. With a strong pipeline of potential blockbuster drugs and a track record of successful drug launches, the company has significant growth potential. The pending acquisition of Celgene Corporation further enhances Bristol-Myers Squibb’s growth prospects.
5. Abbott Laboratories (ABT): Abbott Laboratories is a diversified healthcare company with a focus on medical devices, diagnostics, nutrition, and branded generic pharmaceuticals. Its leading products in areas such as cardiovascular devices, diabetes care, and diagnostics contribute to its growth potential. Abbott’s investments in research and development drive innovation and pave the way for future growth.

When evaluating healthcare stocks, it is important to consider factors such as the company’s drug pipeline, product portfolio, regulatory environment, and competitive landscape. Additionally, stay informed about industry trends, advancements in medical technology, and changing healthcare policies that can impact the growth potential of healthcare stocks. Diversifying your portfolio across multiple healthcare companies can help mitigate risk and capture a range of growth opportunities within the sector.

Conclusion

As an investor, navigating the world of stocks requires careful consideration, research, and an understanding of market trends. In 2018, the economic outlook appears positive, with many opportunities for investors to capitalize on. It is crucial to assess various factors before making investment decisions, including your time horizon, risk tolerance, financial goals, diversification strategies, and thorough market research.

Within the stock market, different sectors offer unique opportunities. Technology stocks continue to dominate, with companies like Apple, Amazon, Microsoft, and Alphabet leading the way in innovation and growth potential. Healthcare stocks, such as Johnson & Johnson and UnitedHealth Group, offer stability and growth prospects due to factors like advancements in medical technology and an aging population.

For income investors, dividend stocks like Johnson & Johnson, Procter & Gamble, and AT&T can provide a consistent stream of passive income. Emerging markets, including China, India, and Southeast Asia, present exciting growth opportunities due to favorable demographics and expanding consumer markets. However, investing in emerging markets requires careful assessment of country-specific risks.

In conclusion, the stock market offers a plethora of opportunities for investors in various sectors and regions. By considering your investment goals, conducting thorough research, diversifying your portfolio, and staying updated on market trends, you can position yourself for potential growth and long-term success in the dynamic world of stocks. As always, it is recommended to consult with a financial advisor to tailor your investment strategy based on your individual financial circumstances and goals.