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One-Third of Investors Believe Taxes & Corporate Earnings Will Influence 2018 Stock Prices

This week’s Sentiment Survey special question asked AAII members what they thought would most influence the direction of stock prices in 2018. Almost one out of three respondents (31%) said taxes and/or corporate earnings. Many of these respondents expect the tax cuts to lead to higher profit growth. Approximately 29% said politics, domestically or internationally. More than 8% of all respondents mentioned President Trump by name, some favorably and some unfavorably. The Federal Reserve, interest rates and monetary policy were named by 16% of respondents. Some respondents listed more than one factor they expect to influence the market.

Here is a sampling of the responses:

  • “Corporate profits and the new tax law.”
  • “Tax cuts will help. Only an unexpected geopolitical event will cause a downturn.”
  • “Fed activity around interest rates.”
  • “Growth of worldwide economies is important, but politics with Trump could also produce a dramatic change.”
  • “Animal spirits and money from the sidelines finally.”

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