STOCK PRICE OUTLOOK FOR 2017

The US economy is good and better than most if not all foreign countries.  We have recovered better from the Financial Armageddon (aka Great Recession) than Europe, for example.

My guess is the following, that legislation of taxes and regulation won't happen until at least the end of the year.  With the current good economy and increasing earnings of companies, stock prices may continue to rise in some irregular fashion, occasionally creeping to new all-time highs.   but do your own due diligence, as they say. The worry that the Health Care Industry will be decimated seems to be over and Health Care company (pharmaceuticals, and others) stock prices have started to rise again.  After all, the bulk of the Baby Boomers is just starting to dig into retirement.

I have mixed feelings about the war on pharmaceutical prices being over because something is needed badly to control prices, but the armistice is good for my Health Care mutual funds and REITs.

There undoubtedly are many regulations that are not needed but no doubt they are not the ones that will be discontinued (One that stopped severely mentally disturbed people from buying guns, has already been eliminated).  Decreasing the income taxes is a very inefficient way to stimulate the economy  (the wealthy buy bonds and property elsewhere like Switzerland, the middle class pay down debt).*

Decreasing corporate business tax may be different.  The stated rate is 35.5% but the average company pays about 27%.**  An analysis I have read in Barron's suggests that lowering the corporate tax rate to 22% might simulate enough business to pay for itself and the average company will actually pay about 15%.***  Might be worth a try to see if it works.  Going lower seems as if it will add to the deficit.

* http://stopcontinentaldrift.blogspot.com/2010/05/effectiveness-of-taxes.htm
** GAO, however, sees it differently and says that the percentage of companies that pay no income tax is a little over 60 %.  More large corporation pay some tax, but about 40% do not.  What GAO says is of profitable large corporations, 20% or fewer of them pay no Federal income tax, depending on the year.  https://www.gao.gov/products/gao-16-363
*** https://www.barrons.com/articles/cut-the-top-u-s-corporate-tax-rate-to-22-1480137247?tesla=y&mod=BOL_twm_ls&mod=article_inline