Overseas cash, stocks, Mexico and the end of dynasty in North Korea. Here are my three big money 2017 predictions, with some bonus geopolitical and sports thoughts thrown in:
1. Congress will reach a massive repatriation deal
There's been much talk but little action the past few years toward reaching a deal on bringing trillions of overseas dollars back to the U.S. Next year changes that. Despite the fact that there are currently a few competing plans floating around on just how to do it, some prominent Democrats are on board with the concept and I believe compromise will be reached. Just how it will look and what kind of tax "holiday" we may see remains to be seen, but corporate cash should pour back into U.S.coffers.
2. The Dow will rise 8-12% in 2017
As long-time viewers know, I've been bullish on the U.S. economy since 2011. But I haven't been this bullish on stocks in a long time. The GOP "triple play" in D.C. will do what it can to ensure wins in a number of key 2018 senate elections, consumer confidence is up, and rate hikes may drive more money from bonds to stocks. I'll also probably need prediction #1 to come true for these kinds of returns to happen, so in some ways this is a two-part prediction.
3. Doubling down on Mexico.
I first wrote about my long term optimism for Mexico and its economy back in late 2013. Though Mexico's GDP has slipped just a bit since then, the Mexico IPO stock index is up about 8% in that time. Local investors remain largely optimistic. The big wildcard is, of course, the incoming Trump administration and any potential changes to NAFTA. Still, when headlines are the worst it's often the best time to invest. And I believe Mexico's positive demographic profile and a recovery in oil prices will help its economy and stock market long term. Mexican stocks should have a good 2017.
Bonus geopolitical prediction: The Kim dynasty finally comes to and end and North Korea experiences massive change, providing an immediate boost to South Korean and Japanese markets.
Wild card sports prediction: My Virginia Tech Hokies beat Clemson at home, win the ACC football championship and finish the season ranked in the top 10, potentially securing a playoff bid. Of course, I'm biased on this one.