If you are looking for the best place to invest in 2018, one of your best bets is to put on the hat of the investment bank and bet on "mergers and acquisitions": mergers and acquisitions. The biggest of 2017 - the proposed Disney-Twenty-First Century Fox deal for $ 52 billion - is just the beginning. Tax reform is a piece of the puzzle. It promises to free billions of corporate cash in overseas accounts and reduce the corporate tax rate to 21%. The attitude of American consumers is another component. Consumer spending reached a record one month that had not been seen since 2009, when the US economy. UU He had just emerged from the recession and the financial crisis. But the key element is what I will call corporate sentiment. In other words, CEOs and their boards of directors go through their own cycles of optimism and pessimism, which affects the way a company decides to put its excess cash to work. 2018: the year of mergers and acquisitions The change is evident in a recent Deloitte "M & A 2018" survey of 1,000 executives from large corporations and private equity firms. On the one hand, a growing number of companies, two-thirds of respondents, say that their cash reserves increased and that "the main intended use of that cash is for mergers and acquisitions agreements." In recent years, companies indicated that they were more likely to make organic investments-to grow an internal business-as the most likely use of their cash reserves. But as the report points out, "this is no longer the case ... Predominantly, companies now say they are looking for mergers and acquisitions opportunities, and 40% cite it as their main intention." In addition, almost two-thirds of companies "anticipate that the average size of transactions in the next 12 months will exceed those of last year." We have already seen an increase in mergers and acquisitions as the year comes to an end. Analysis firm Dialogic called November the second-largest month for mergers and acquisitions since it began keeping records in 1995. A low risk investment What is the best way to play this kind of trend? You can bet on individual stocks. For example, Bristol-Myers Squibb Co. (NYSE: BMY) and Biogen Inc. (Nasdaq: BIIB) are sometimes mentioned as potential purchase candidates in the pharmaceutical sector. Among the strongly affected retail sector, Nordstrom Inc. (NYSE: JWN), whose shares fell 40% since 2015, has been mentioned as a possible purchase target. In the technology sector, shares of Akamai Technologies Inc. (Nasdaq: AKAM) rose 14% on Monday on the growing outlook for a purchase. But such investments are all-or-nothing bets. A better way is to invest through a publicly traded fund (ETF), such as the IQ Merger Arbitrage ETF (NYSE: MNA). It increased by 5% this year and by 24% in the last five years. The ETF, developed by New York Life Investment Management LLC and managed by IndexIQ Advisors LLC, invests in a wide range of publicly announced mergers and acquisitions candidates. It is a good and low risk way to play the next explosion of offers in 2018.
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