2017 will go down in history as a very unusual year for the stock market. Traditional rules appear to have been discarded, with the major indexes pushing higher in the face of macro-bearish pressure.

The search for reliable investments that can carry a portfolio through the rest of 2017 has many investors scratching their heads. Time-tested market wisdom has been tossed out the window as the world changes at breakneck speed. 

Finding the best stocks to buy and hold for the rest of 2017 requires identifying the major themes of the year. Then, you’ll need to locate stocks that are most likely to benefit from these themes.

Obviously, there will be multiple stocks that will profit from each theme, helping you to  diversify your portfolio while still hitching your boat to these all-important market movers.

The 3 Leading Themes Of 2017

1. Donald Trump
There is very little middle ground when it comes to our new president. People seem to either love him or hate him, and it is this dichotomy that’s signaling significant changes in our country. 

So far, Trump’s largest contribution to the economy is his focus on deregulation. In his first 100 days in office, he rescinded more regulations via the Congressional Review Act than any other president. The economically relevant regulations Trump loosened include government contracting rules, coal mining regulations, and financial policies. 

#-ad_banner-#Perhaps the largest beneficiaries of deregulation this year are the manufacturing and energy sectors, and specifically coal. The Washington Times reports that “Federal regulations siphon an estimated $4 trillion a year out of $18 trillion in the U.S. economy. However, the immediate impact of fewer federal rules — and less fear of the future — is hard to gauge in many industries. The rollback of regulations has had the most immediate impact on the coal industry after Mr. Trump revoked Obama-era rules to combat climate change.“

After-tax manufacturing profits soared nearly 20% in the first quarter of 2017 according to the U.S. Census Bureau. The deregulation theme points toward the coal, manufacturing and finance sectors as hosting some of the best stocks to buy and hold for the rest of 2017.

Possible repatriation of corporate cash held overseas, along with the president’s plan to slash corporate taxes, will provide additional domestic capital for firms to put to work. This additional investment should see earnings, and with them prices, rise in the long run.

Cloud Peak Energy (NYSE: CLD), J.P. Morgan (NYSE: JPM), and BHP Billiton (NYSE: BHP) are my favorite names to benefit from the Trump theme. 

2. Climbing Interest Rates
Unbelievably, stocks have continued to push higher in the face of rising interest rates. The Federal Reserve has already raised rates twice this year. Unlike past Federal Reserve boards, the current one is very clear about what to expect regarding interest rates. They have stated that there will most likely be three interest rate increases in 2017, meaning there’s a very high chance one is coming in the fall. This new transparency is designed to avoid any shocks to the system that may trigger another financial crisis. 

The one thing that could derail the interest rate increase trend is inflation. Remember, climbing inflation is the economic justification for interest rate increases. Inflation has slowed down and is below the Fed’s stated goal of 2%. Should inflation continue to slow, interest rate increases may be delayed in response. 

Increased interest rates work to lift banks and financial companies since it allows them to charge borrowers higher rates, thus increasing profits. When climbing rates are combined with deregulation, it acts as a double shot of adrenalin to the banking sector.
 
Bank of America (NYSE: BAC), Capital One Financial (NYSE: COF), Charles Schwab (NYSE: SCHW) are my favorite names to benefit from climbing interest rates.

3. Asia And Emerging Markets
The Asian and Emerging stock markets are on fire, and I fully expect the uptrend to continue through 2017. Research from Fidelity International shows Asian-Pacific stocks soaring nearly 37%, and emerging markets as a whole follow them closely, with a 36% advance in the last 12 months. 

Two of the factors driving Asian-Pacific stocks higher are improved factory activity and a rebounding steel industry. Also, the GDP of China and India has grown six-fold since 1970 while the G7 nation’s share of global trade has dropped from 50% to 30%, according to research by FMG Funds. 

Emerging markets are benefitting from steady economic growth as well as an ever-increasing amount of capital from developed nations sent to chase profits in these nascent economies. 

Vanguard FTSE Pacific ETF (NYSE: VPL) and WisdomTree Strong Dollar Emerging Markets Equity Fund (NYSE: EMSD) are my top picks for the best stocks to buy for 2017 in the Asian and Emerging markets theme.

Risks To Consider: There are inherent risks investing in the stock market. There is no guarantee that the listed themes will continue through 2017, or that the named stocks will outperform the market. Anything can happen in the economy and stock market so always use stop-loss orders when investing.

Action To Take: Consider adding one or more of the above stocks to your portfolio. 

Editor’s Note: Bank on the “Rust Belt Revival,” the next big “Boomer” Phenomenon, or just cash in on “2017’s biggest Win-Win” the choices (and the profits) are all yours. Check out the list here…