The top 3 ways to position your money next year to take advantage of the new tax plan.
1. Invest in small business - Because pass through businesses get a new 20% deduction and corporations have a huge decrease from 35% to 21%, small businesses will explode. Any investment that focuses on small cap companies will probably fair well. (Dan can recommend some investments if you wish.)
2. Invest in companies and funds positively affected by the Repatriation Act - The Repatriation Act allows businesses to bring money back in the U.S. and pay a much lower rate than they would have. This favors certain companies and there are certain funds that focus on companies that buy back their own shares which is what most companies do when they bring this money back. Because they are making large purchases of their own stock, the stock prices go up. (Dan can recommend some investments if you wish)
3. Invest in financials - The tax bill will add to the National debt which could cause inflation to begin. A little inflation is fine as it causes wage growth which is great for the economy. The Fed will also begin raising rates next year which will allow financials to do well. (Dan can speak to specific investments here or not.)
With the passage of the tax reform bill, Social Security's Cost-of-Living Adjustment (COLA) raises will be pegged using chained Consumer Price Index (CPI) as opposed to regular CPI. So Social Security will not grow as fast and it won't grow with inflation. This will mostly affect lower income seniors as it will cut fixed income.