5 Investment Strategies That Could Shine in 2018

The five FAANG stocks – Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX) and Google parent Alphabet (GOOGL) – soared to vertiginous heights last year, closing out the year with an average return of 49.12%.

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The five FAANG stocks – Facebook (FB (opens in new tab)), Amazon.com (AMZN (opens in new tab)), Apple (AAPL (opens in new tab)), Netflix (NFLX (opens in new tab)) and Google parent Alphabet (GOOGL (opens in new tab)) – soared to vertiginous heights last year, closing out the year with an average return of 49.12%. That’s in no small part due to the strength of their underlying businesses. But the stocks also rode high on investors’ infatuation last year with growth and tech stocks.

Although it’s possible that 2018 could see a continuation of last year’s trends, we think it’s more likely that other sectors and styles will take the lead. That’s because other asset classes, such as emerging markets and small-company stocks, show more promising value compared with U.S. growth and technology names. That’s also due to certain secular trends, including the current phase of the business cycle and the recently passed tax-reform law, which stand to benefit other asset classes.

Here is a closer look at five investment strategies and fund categories that could rule this year.

Data is as of Jan. 4, unless otherwise noted. Click on ticker-symbol links in each slide for current share prices and more.

Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.