Top Investment Ideas For The Remainder Of 2017

While allocations to bonds, and other fixed income securities, may vary based upon market conditions and investor objectives and risk appetites, certain types of bonds, from certain types of issuers, can still find a home in most investment portfolios throughout most market cycles.

• Look to certain “Trump Trade” sectors for longer term growth potential

While recognizing that Trump’s suggested priority initiatives are subject to repeated change and may either take longer than expected to achieve, not come to reality or not deliver upon the intended results if achieved, investors would be wise to consider certain “satellite” allocations within their investment portfolios to areas of the U.S. stock market that should ultimately benefit over the term of a Trump Presidency (ex. Energy Equipment & Services, Industrials, Banks, Defense and Cybersecurity).

• Consider all U.S. market capitalizations

While many have suggested that U.S. Large Cap stocks may struggle to move higher given current valuations, the strength of their 1st quarter performance and threats posed by a strong U.S. dollar against multi-national Large Cap companies in general, there still may be more upside potential for U.S. Large Cap stocks within this secular bull market in our view. Though not necessary the best measure of valuation, consider the following Price/Earnings (P/E) ratios of the three U.S. market capitalizations as valuation proxies for these purposes:

PE Ratios

Source: Bloomberg, April 10, 2017. P/E Ratio is the ratio of the price of a stock and the company’s earnings per share. It is calculated by taking the last price of a stock divided by the trailing 12 month earnings per share (EPS). Past performance is not indicative of future results.

While value can currently be found in U.S. Mid-cap and U.S. Small Cap, the return potential for U.S. Large Cap should not be entirely discounted, recognizing that all three market capitalizations are currently trading relatively expensive to their longer term averages – though some are more expensive than others, at least according to this one measure.

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Disclosure: Hennion & Walsh Asset Management currently has allocations within its managed money program and Hennion & Walsh currently has allocations within certain SmartTrust® Unit ...

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