LA Times: In 2017, anywhere investors threw money it multipliedA look at the performance of stocks, bonds, gold, cryptocurrencies and the rest in 2017.

Investors weren’t challenged to make money in 2017. It was almost impossible to lose it.

The trading year that ended Friday was remarkable for the breadth of positive returns. Nearly every major category of investments — including U.S. stocks and bonds, foreign stocks and bonds, real estate and gold — finished the year in the black.

That would be unusual on its own, but was more so because it happened in a year when the Federal Reserve was pushing short-term interest rates up. Rising rates can be poisonous for investments across the board. But not in 2017.

True, conventional investments paled compared with the mania for so-called cryptocurrencies like Bitcoin, which rocketed 1,400% to about $14,500. But in the core stock and bond portfolios held by most investors, here’s a look at what drove market returns this year, and the potential implications for 2018.

U.S. stocks

Wall Street has nearly run out of superlatives to describe the year’s surge in share prices. The Dow Jones industrial average ended Friday at 24,719.22, down 118.29 points for the day but up 4,956 points, or 25.1%, for 2017. The index hit a record closing high of 24,837.51 on Thursday.

Technology giants were among the market’s biggest stars, driving the tech-dominated Nasdaq composite index to Friday’s close of 6,903.39, up 28.2% for the year — its best return since 2013. Market leaders included Nvidia, up 81%, Amazon, up 56% and Facebook, up 53%.

But the 2017 rally broadened well beyond tech issues. The blue-chip Standard & Poor’s 500 index, which slipped 0.5% on Friday to 2,673.61, rose 19.4% for the year. Including dividends, the return was 21.8%. Shares of smaller companies, which had outpaced blue chips in 2016, lagged this year but still posted healthy results. The Russell 2000 small-stock index was up 13.2%.

Stocks were fueled by unexpected strength in corporate earnings. Underpinned by consumer and business spending worldwide, earnings of the S&P 500 companies are projected to rise 17.6% in 2017, according to S&P Dow Jones Indices. That would be the biggest gain since the rebound that followed the financial crisis.

In the third quarter the U.S. economy grew at the fastest pace in three years, thanks partly to a jump in business investment. Also, the dollar’s almost 10% drop against an index of other major currencies this year has helped make U.S. exports cheaper overseas. With that backdrop, stock bulls viewed the Fed’s rate hikes more as confirmation of the economy’s health than as trouble.

The Republican tax-reform plan that passed in December further stoked investor optimism. The plan’s centerpiece slashes the top corporate tax rate to 21% from 35%, guaranteeing a 2018 windfall for many companies.

Some investing pros attribute much of the stock market’s 2017 swagger to faith in President Trump’s controversial economic policies, including tax cuts and deregulation. Joshua Brown, chief executive of Ritholtz Wealth Management and “not a fan” of Trump, nonetheless credits him with “the ignition of ‘animal spirits’ in the stock market and the real economy” — citing a phrase the economist John Maynard Keynes used in the 1930s to account for the “spontaneous optimism” that often drives human decision-making.

But with the average S&P 500 stock selling for a rich 18.5 times analysts’ expected per-share earnings in 2018, a key fear is that there is no room in share prices for anything to go wrong — such as, say, a Trump-triggered global trade war. Mutual fund titan Vanguard Group, in its year-ahead forecast, warns that “for 2018 and beyond, our investment outlook is one of higher risks and lower returns” as the economic expansion and stock bull market both near their nine-year anniversaries.

But Brown cautions against underestimating the current momentum of the economy and markets. The history of markets over the last 200 years is “one impossible thing after another being toppled and then surpassed in rapid succession, just when everyone said no chance,” he said.

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