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  Your 2018 Resolution: Huge Gains Riding These Strong Trends  
  Greg Guenthner on 2018-01-03 15:02:11.0
 
 

This post Your 2018 Resolution: Huge Gains Riding These Strong Trends appeared first on Daily Reckoning.

After overindulging during the holidays, most folks strive to get their lives back on track in January…

This year will be different! No more sweets. No booze. Instead of snacking on the couch and binge-watching my favorite shows, I'll hit the gym three days a week?

Of course, there are plenty of companies ready to cash in on your dubious resolutions. Weight Watchers (NYSE:WTW) is hyping the season with a new publicity stunt featuring DJ Khaled. He's a new spokesperson for Weight Watchers new ?freestyle? program, the company announced yesterday…

?I'll just have the salad.?

The stock rallied more than 8% on the news, presumably because investors believe another celebrity endorsement will do wonders for WTW shares. After all, Oprah has made about $300 million from Weight Watchers stock after she hopped onboard with her endorsement in 2015, Business Insider notes. A famous hip-hop star like Khaled might just be what WTW needs to juice shares this year.

Of course, Khaled could fail at his public bid to slim down (whether that hurts WTW remains to be seen). In fact, most of us scrap our New Year's resolutions before they become a part of our routine. It's all too easy to cheat on a diet if you have a stressful day at work or skip going to the gym because you overslept and it's only 5 degrees outside.

You know how most of these ?resolutions? turn out. No one can find an open treadmill at the gym in January. But by February, the place is a ghost town.

With that in mind, now's not the best time to trade nutrition or gym stocks in hopes of a first-quarter pop. Yet the herd tried to play these names every year without fail. They're betting on the average, lazy American making permanent improvements instead of falling back into the same routine.

But here's the rub:

Strong trends usually persist.

Everyone expects major changes in the markets as we begin 2018. Stocks were up big in 2017. Therefore, some investors reason the market will drop this year. Using that logic, the strongest stocks on the market will be the ones that will endure the biggest drawdowns, right?

Not exactly.

The stock market doesn't care that our calendar has flipped to 2018. We don't have to look very far to find proof, either. As we begin the new trading week, the stocks that were the strongest performers of 2017 are already blasting higher.

Just look at semiconductors ? a group that spanked the major averages with 2017 returns nearing 40%. The VanEck Vectors Semiconductor ETF (NYSE:SMH) busted out of its December funk to trade higher by more than 2.6% yesterday.

Big tech names are also catching a bid. Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) each made significant one-day pushes toward their all-time highs. These high-fliers are all heading back to the buffet for seconds in 2018.

While seasonal stocks like Planet Fitness and Weight Watchers are getting all the media attention, the market's strongest stocks are stalking new all-time highs. Which would you rather own?

Sincerely,

Greg Guenthner
for The Daily Reckoning

The post Your 2018 Resolution: Huge Gains Riding These Strong Trends appeared first on Daily Reckoning.

 
 
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