January 1, 2025
My Top Trend for 2025 & 2 Picks to Profit from It!
Dear Subscriber,
 |
| By Sean Brodrick |
Happy New Year!
It’s only the first day of 2025. But there are some investment trends already shaping up for the year ahead.
And I can already see that their profit potential is enormous.
So, today and tomorrow, let me share two of my highest-conviction trends with you.
And in the spirit of ending the season of giving on a high note, I’ll also share four solid ideas for how you can profit from them.
Let’s get into the first of these profit-grabbing forecasts … and my first two recommendations …
Big Companies Will Reap
the Biggest Tax Cut Gains
Republicans in Congress have said their top objective is to extend the 2017 tax cuts.
Those resulted in a sharp cut in the corporate tax rate from 35% to 21%.
The promised extension would prevent some $3.3 trillion in tax breaks from expiring at the end of 2025.
And now, Trump’s new proposal is to cut the corporate tax rate to 15%.
Goldman Sachs estimates the collective Trump tax cuts could boost corporate earnings by 20%. And Goldman is just one of many Wall Street firms forecasting higher profits for the S&P 500 next year.
FactSet reports the consensus estimate is for S&P 500 earnings to grow 15% year over year in fiscal year 2025.
This expansion of earnings growth is a key catalyst many bullish strategists are watching.
So, even though the S&P 500 has rallied more than 20% in each of the past two years, the coming tax cuts are leading many Wall Street analysts to predict another double-digit percentage gain in 2025.
On the other hand, if earnings fall short of these lofty goals, the markets will likely tumble.
2 ETFs to Play It
Big tech, big oil, big pharma, big banks and other big businesses tend to do very well when tax rates drop.
So, I have two options for you: the Vanguard Mega Cap Growth ETF (MGK) and the Invesco S&P 500 Top 50 ETF (XLG).
MGK holds 71 securities in its basket with key holdings in information technology, consumer discretionary and healthcare.
Just be aware that 38% of its assets are in three stocks: Apple, Nvidia and Microsoft.
The fund has a very low expense ratio of 0.07%, which is what it will cost you annually to hold this ETF. It has a dividend yield of 0.4%.
MGK recently traded at $353.96.
XLG has a narrower focus than MGK. XLG tracks the largest 50 stocks in the S&P 500. And 34% of this fund is invested in the same three stocks: Apple, Nvidia and Microsoft.
As for differences, XLG has a higher expense ratio of 0.2%, a slightly higher dividend yield of 0.7% and a lower share price.
XLG recently traded at $51.15.
Here is a performance chart of the two funds over the last year …
You can see that these funds perform nearly the same.
The choice here is whether you want to pay a higher share price to get MGK with its lower expense ratio.
Also, while both funds are liquid enough, XLG has about triple the trading volume of MGK. Meaning, it’s easier to buy and sell.
All the best,
Sean Brodrick
P.S. Gold had a banner 2024. It started to surge the day the Fed started hinting at rate cuts.
Back in the 1970s, a cycle of lower rates helped propel gold up 262%. If just the whisper of a rate cut was enough to take gold up as much as 35% in a year, what do you think will happen when the Fed slashes rates even more in 2025?
I reveal my 2025 forecast for gold … and much more … here.
Everyone who attends is eligible to claim a Weiss-exclusive 2-gram gold bar. So, we’re not keeping that invitation open for much longer.
Don’t wait. See how you can claim your gold bar here.
Tidak ada komentar:
Posting Komentar