10 Stock Market Predictions For 2018
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Today we discuss my 10 predictions for the stock market in 2018. Will the Stock market crash in 2018, will certain stocks do well, and much more! Enjoy!
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10 stock market predictions for 2018 that is what we’re discussing here. Today, guys, we’re discussing my 10 predictions I’m making for the stock market in 2018. Some of these are more macro economic related, some of these have to do with individual stocks and some moves I see making some of these are some money that I see coming out of some asset classes and into some new asset classes.
So you know, it’s kind of harder for me to make these type of predictions, right, because I’m a longer term investor, right? I’m usually thinking like several years out to make short term predictions on what’s going to happen over the next year. It’s definitely a challenge for me, but I’m gonna get my best attempt at it today.
Guys, I hope you got a ton of value out of this video today, make sure if you’re new to the stock market, you click that first link in the description after this video is over today, that goes into my 11 part stock market investing mastery course, which goes into everything I look for in a particular stock and exactly how I pick stocks.
Let’s go ahead and get right into this. My first prediction for the stock market in 2018 actually centers around apple in the way Apple stock is going to start to be viewed I’ve been talking about this for a little over a year now on my the way the mindset in my opinion.
The investment community will start to focus around Apple we know apples already the biggest company in the world, the largest market cap, more people are invested in Apple than pretty much any stock out there. Right? So I see a mindset shift happening with Apple and I see it commanding a higher valuation in the future.
The reason being is a lot of times Apple has just been seen as a tech company, right. So if they experienced strong growth at a particular time, they got a high p e, if they weren’t experiencing strong growth and they got a super low p e compared to the market, right? There would be like an 11.
Pe while the markets at like a 20 something right? So there’s been a whole disconnection on where Apple’s valuation is that I think 2018 is a year where Wall Street in investment community in general really starts to change your mind around apple and start to focus more around Apple is like a Coca Cola, okay, their business is not going away anytime soon, they’re actually going to have a very strong growth this year.
So I think they’ll start to be viewed as like a Coca Cola with much stronger growth. Why is this mainly because of the services business, okay, their services, business has just become their second biggest business, that’s going to continue to explode throughout 2018. And because of that business, it’s a lot of recurring revenue.
Okay, people that are signed up for services and whatnot, that are monthly plans that just keep getting renewed and whatnot, more people buying apps, all this kind of stuff, guys, and an apple just keeps innovating. So I think for that reason, it’ll be a lot more consistent revenue from the services business, I think a lot of the mindset will kind of shift.
My second prediction on making for the stock market in 2018 actually centers around the fact that the stock market is not going to do as well in 2018, as it did in 2017. Okay, and I know that’s not fun to hear, but I just do not see it happening. Okay. 2017. That’s been an extraordinary year to be in the markets. Right?
2017 we have the NASDAQ is going to be up somewhere around 27 to 30%. Okay, the Dow Jones is going to be up somewhere around maybe pushing up closer to 25%. These are ridiculous returns on the stock market overall, right? The markets on average only go up about 8% a year. Okay. And we’re we’re around triple that.
So this is absolutely amazing year and amazing year. Why is this mainly because tax reforms coming. So the markets kind of pray some of that in, and also our company’s earnings have been phenomenal for the most part this year. Okay, those two things are obviously the taxes is kind of already priced in for the most part rate.
And if company, I don’t see companies having that explosive of earnings this year, because expectations were definitely kind of kind of muted going into this year. And then they were able to beat on the upside because of us got even a little bit stronger, and China got a little bit stronger.
And when you match that with a little weaker expectations, you’re setting yourself up for a very strong year in the markets, which has been an extraordinary year when you when you factor in. Usually if the market goes up 20 30% in a year, usually it means you are coming off of like a recessionary situation where the stock market had crashed, and it had come back a long way.
Right. This was like coming off of 2016 like wasn’t that bad of a year 2017 was just a phenomenal year guys. So for that reason, I do not see the markets performing as well as they did in 2017. And that’s just the way it goes. My third prediction for the stock market in 2018 actually centered around the fact that I see gold, some gold investors, some silver investors, and some stock market investors actually moving money to kryptos.
Okay, so money they would usually maybe put into gold or silver or stock market, I think they will begin to put some of that money into crypto especially with kryptos starting to become regulated and whatnot. And these huge gains everybody’s seeing every day, you know, when everything is in the news, right? So everybody’s seeing this.
I think some more money’s gonna flood into there unless everything goes completely bad. In the very short term here, I see more money being flooded in, especially from the gold asset class. That’s the one I see a major shift in because a lot of the same thoughts behind a gold investor actually very similar to what the thought process is behind someone that invest in a Bitcoin or cryptocurrency see a lot of the same fears and whatnot.
You know, and around, you know, fiat money and all these kind of things, right. So I see definitely some of that money switching over to the crypto side, but especially for gold investors. So if you’re a gold investor out there, you definitely kind of have to worry about this because I think it’s already happening to a certain extent.
But it could happen even more just because a lot of the the thought process is similar. And you have gold investors saying, Wow, these guys are getting this amazing return over here. And their their thought process is somewhat similar to ours, maybe we should go over there.
And I think we’re gonna lose some stock market investors with some money as well going over to the crypto side, just because they see the gains right now a lot of people want to get those gains right now. But a long term I think is beneficial to the market, just because it’s so much attention into investing right now that I think it will actually be beneficial.
Over the long term, I just see it in the short term, I see some money switching sides, guys. So that’s the prediction number three, prediction number four has to do with Tesla and automakers. I think 2018 is really going to be the year where the automakers realize how big of a threat Tesla is to them.
I don’t think it’s really fully processed into these automakers heads yet, I think they’re just kind of have been in denial last few years. And we’ve seen this with the amount of investment they made, right? You can these companies haven’t been taken investing in electric vehicles seriously, really.
Until the past 12 months, guys, these are things they should have been taken super serious five to 10 years ago, and they’re just starting to funnel all this money. And you hear all these announcements that the automakers are making, saying, oh, we’re gonna stick $3 billion in this world invest $10 billion over the next 10 years and electric vehicle technology and all this kind of stuff, it’s really late to the game.
Tesla has been on this game for a long time. And Tesla’s in 2018 is finally gonna go into mass production for the first time, right first time Tesla’s ever going to be in mass production. So up until this time, you know, Tesla’s just kind of been like a nice vehicle, almost like a, you know, a luxury, you know, car company would be or something like that, like selling, you know, 10s of 1000s of cars a quarter and things like that.
Now, they’re gonna start moving to hundreds of 1000s of cars, and the numbers are gonna start getting real big. And these automakers are going to also realize how big of trouble they are really in because I just need the majority of them out there, if not all these guys, they have not realized how big of a threat of the Tesla is.
And I think 2018 is really the year it starts to set in, in some of these guys start to panic, and they’re like, Oh, my gosh, Tesla’s selling this many vehicles this year, they’re probably going to do this many next year in our volumes are going to start going down. What the hell do we do now?
So I think that is going to be a very interesting point. And I think Wall Street’s actually been way ahead of where the car companies have been, because we’re, you know, GM is valued at where Ford is valued, where a lot of these auto stocks are valued at, you know, four or five p e, six p E’s, right?
They the Wall Street seen this coming for a while, I just don’t think the automakers have really fully seen this for coming for a while. I think 2018 is when they’ll finally wake up and say, oh, man, this is not good. prediction. Number five for the stock market in 2018 actually centers around big media company.
So if you have investments in big media companies, I think there’s gonna be a big mind shift that happens with these companies in 2018 2017 has really been the year 2016 and 2017, I would say where big media companies have kind of realized they need to be on social media, right? So we’ve seen big media company after big media company, get on to YouTube.
I mean, if you go on the trending tab on YouTube, so much of it is like popular TV content, whether it’s a Jimmy Fallon or Jimmy Kimmel or you know all these different things that are super popular on TV SNL, you know, and whatnot, big media companies have started realize they need to be on these platforms, Snapchat, you know, ESPN just has a full show on on Snapchat now CNN has a full show on Snapchat.
Now, these big media companies have realized they need to take social media somewhat serious, but I think 2018 is the year they really realize social needs to be our first strategy, our main strategy, okay, I think this is really the year they’re going to kind of shift from you know, we’re we’re TV first that’s worse, we’re centered around to also now we need to focus our attention more on social because that’s where people are at.
And people are cord cutting in such big, such big amounts that we need to be on YouTube, we need to be on Snapchat, and we need to be the number one player there because we got to get the ground by b 10. before we’re we’re completely irrelevant, things like that. So I think if you own some of the big media companies out there, just realize.
I think a lot of their mind shift will will will change and they might end up spending a lot on social media over the next few years, which could potentially hurt the profitability in the short term just because sometimes you have to, you know, spend a lot of money to maybe make a bunch of money in the future so that could be what happens there guys, big media company changing their mind.
My six prediction for the stock market in 2018 is I believe dividend paying stocks will up their dividends in bigger amounts than they ever have before. Okay, why is this? Why are they going to up their dividends so much? Well, one it should be a pretty good year for earnings company mode.
The majority of companies out there should be able to grow the US is very strong right now and getting strong. China’s very strong and getting stronger right now. So overall, if you look at the the landscape out, there should be a very good year. So that in itself lends itself very well for upping dividends, right. But that’s just not it, right?
Corporate taxes are going down starting next year, right? What’s what does that mean? That means the majority of companies out there going to be much more profitable. And that bottom line, they’re going to have much more money to spend on that, that bottom line that they can do stuff with.
So what do companies usually do? Do they go out and hire a million workers? No, usually what they do is they do more share buybacks, or they up those dividends. So I see dividends being increased more than ever, throughout 2018, I think you’re gonna see a lot of big dividend increases for a lot of companies out there, guys.
And I just think that’s the way it’s going to be I think share buybacks will also be increased a good amount, but I see dividends is really being the one that’s going to be increased, just because these companies are going to have a lot more money laying around that they’re not going to know what to do with so why not up the dividend.
My seven prediction for the stock market in 2018, as a lot of the low wage paying companies profitability will be hurt dramatically in 2018. Why? Because a lot of states around the country are actually upping their minimum wages are set to increase in 2018.
But not just that, we have a very, very strong job market out there, we have very low unemployment rate, I see 2018 has been the first year in a long, long time, real wages have increased quite a bit. So I’m going to do an illustration for you guys here.
Okay, let’s say a company, you know, goes from having to pay $8 per worker, you know, per hour to $10. Okay, so it’s a $2 increase. So if you take $2 extra per hour, the company, let’s say has 40,000 employees, that’s $80,000, right? And then you times that out by let’s say, the average worker works 40 hours a week, which obviously, you know, in a perfect world, that’s not the way it works, right?
You know, it’s like 20 hours, 30 hours here, but let’s just say they all worked 40 hours, right? That’d be $3.2 million per week extra in wages, they would have to pay, right? 3.2 million times 52 weeks in a year, that’s $166 million coming out of that net income line, going more toward wages, right?
If we just had 40,000 employees, and the average employee worked 40 hours per week, and they had to get $2 extra per hour, right. So that’s a dramatic number for a lot of these companies that pay very low wages, right, especially if they have huge worker bases and and say the minimum wages, some places actually is going up more than $2.
So this is something that will greatly affect a lot of these companies that have have benefited from the fact that wages haven’t gone up in a really long time in any meaningful way. And a lot of these states have an increase in their minimum wage and a long, long time, right.
So I think 2018 is where a lot of these companies is going to be like, Whoa, what the heck happened to their profitability also, and they were making great profits now. Now they’re making diddly squat compared to what they used to. So I think that’s something you got to watch.
If you own particular stocks that are in the fast food type industry, right? Any stocks that are in some of the hospitality type industry, the job where people are making really, really low wages, I think that’s something you need to pay attention to my eighth prediction for the stock market in 2018 actually centers around Facebook and Facebook stock.
So Facebook stock, I think is going to go through a very strange transition in 2018. I think it’s going to move from more of a growth investor type stock to more of a value investor type stock. Why is this because growth investors, they really look for revenue growth, and they also look for other metrics, like user growth and things like that, right? value investors are more focused around profits, and where are your profits going? Right.
So what I see happening to Facebook in 2018, is one I think they’re their user metrics are going to slow quite a bit. They’ve done a lot of hacking, in my opinion on how to get those user numbers up over the past few years. And Instagram has helped carry the company as far as making all the metrics look better.
I don’t think Instagram can carry those numbers any longer. I think a lot of the growth behind Instagram as far as new accounts signing up and whatnot, is behind Instagram at this point. And they see Facebook as being a platform that at least in the.
Developed markets is struggling and doing worse than ever before, in terms of how many had the user engagement and things like that, especially going throughout 2018 like every once in a while like to just go on Facebook, like once a month and just see how like the pressing it is man like people that used to post you know, 10 times a day in their new post, like once a week now they they There’s hardly anything going on and Facebook.
It’s crazy, the way it’s changed. So I see, you know, Facebook profits are going to still continue to explode in 2018. I just don’t think the revenue growth is going to be as strong. And I also don’t think the user metrics are going to be as strong as far as the growth goes.
So I think a lot of the growth investors that are involved with Facebook are going to actually move out of the stock. I think a lot of the value investors are going to come in because they’re gonna say, Wow, this company is so profitable that they’re making so much in profit.
So we want to be in this stock because we don’t see it going away anywhere anytime soon. We don’t see Facebook, just like it disappearing. We don’t see Instagram just disappearing, Whatsapp just disappearing. So therefore we want to be in that so I think it’s going to be a very interesting shift because this has happened a lot of times it companies.
I’m Number one, it happened with Apple when when Apple kind of moved from being, you know, a growth stock and the growth investors weren’t tossing the value that investors started getting in, it’s an interesting shift, because sometimes those stocks can fall a lot and you can get them a fracture a really good deal.
If you’re in a value investor, I’m not saying Facebook stock is going to drop in 2018, or anything like that, I just think it’s going to be a shift in which kind of investor communities in there and it could potentially cause a drop in the stock, if enough of the growth investors want to leave it.
And enough of the value ones, you know, don’t want to come in until they’ve been around for a few months. So definitely pay attention to Facebook stock in 2018. prediction number nine for the stock market in 2018. Also centered around Facebook again, but a move I see remember.
I talked about some of those growth investors leaving Facebook, I see that happening. 2018 So the question is, where are some of those growth investors gonna go? I see them going for Facebook and saying, hello, Snapchat. We’re coming over to you. Why Snapchat?
Well, I think Snapchat should show very strong user engagement numbers in throw 2018 but mainly revenue numbers or revenue numbers for Snapchat should be absolutely amazing throughout the entire year. So I think for that reason, you know, people are gonna say, well, Facebook, maybe you only have revenues going up 10 to 15, maybe 18% or something like that.
Snapchat has revenues going up 5060 7080 100% right. Now, we want to be in that stock. So I think a lot of the growth investors are actually going to flood from Facebook over to Snapchat, because most growth investors are looking for that high revenue growth.
They want that companies that the revenues are exploding at that time, user engagement is exploding all these type of things right now. So I see those those growth investors that are involved with Facebook right now I see a lot of them moving over to Snapchat, because snapchats had a lot of volatility, right?
You can guys right now you can buy the shares for way cheaper than the IPO, what you could actually do is similar to Facebook, and remember when Facebook came public, right, their shares were chopped in half, almost immediately, within a six month span. Facebook stock was trading at half the values we did IPO.
And then all sudden people realize, Oh, no, Facebook’s here to stay. And we kind of start to understand Facebook. And then also more and more investors started to flock in the growth investors started by Facebook like crazy, right? A lot of that same mentality.
I think is going to happen with Snapchat here where people just didn’t understand that first, like, is this really around the state? Oh, it is here to stay? Oh, they have this phenomenal growth. Okay, let’s get in this one. So I see that being a change throughout 2018 prediction number 10 centered around the fact that I do not see any big IPOs coming in 2018 I just don’t see it happening.
Uber has had a lot of issues over the last year and that was thought to maybe go public, right? Airbnb, you know, I’m not sure that one’s gonna go public. There’s been talk of in the past about Dropbox going public, but there’s been talk about that one for several years, Pinterest, like I don’t see any of these companies potentially going public in 2018.
I see there’s just been a lot of talk as of right now. So going into 2018 like, I don’t see like any big huge IPOs happened in 2018 that that are going to be very interesting that are going to be like earth shattering that get the whole stock market’s attention, like Snapchat didn’t this past year, right?
Like an Alibaba did a few years ago, like Facebook did in 2012. Like a lot of these, you know, huge companies that go public and they attract, you know, not just people that are inside the community, but actually people outside of the community that are also paying attention like well, should.
I buy stock in that I don’t really see that happening to those 18. So those are my 10 predictions for the stock market in 2018. I hope you guys enjoyed this. Hope you got a lot of value out of it. Don’t forget if you’re new to the stock market.
You click that first link in the description that goes into my 11 part stock market investing mastery course I hope you enjoy that. I hope you learned a ton from it. Thank you for watching guys and have a great day.