It looks like 2018 will be a though year for your money.
Why am I saying this?
- The dollar has been getting creamed lately and the downward trend is clear for this year.
- Rates are going higher. The Fed intends to raise rates 3 times and the markets are expecting them.
- The new tax plan will bring an inflow of money in the US and that will lead to more spending.
What are the consequences?
1)Unfortunately, your purchasing power will decrease because the dollar is and will get crushed.
2)With higher rates, the cost of holding debt will increase. That will put pressure on consumers' finances.
3)You will see food price, energy costs and many other crucial expenses going up.
How will I profit from it? (I don't give financial recommendations, I only say what am I doing or what I might do. Please do your own research and make your own choices).
- As long as the yield curve does not invert, I will stay in stocks. I will not hold any bonds.
- Commodities will be big winners.
- Getting out of debt should be a priority. The cost of holding debt will go higer with the coming rate hikes.
- Rental properties will be a good asset to hold as rents will go up.
Hope you enjoyed reading this article!