As 2017 came to a close, we put a wrap on a most unusual year. The U.S. markets had driven higher without any significant pullback. Investors, and I was among them, were so filled with disbelief that many carried excessive cash throughout the year, waiting for the nasty whack that never came.

Momentum was the key to a successful year. Nothing worked better as a strategy than buying the stocks favored by institutions and just watching them rise. The FANG group, (Facebook, Amazon, Netflix and Google) was expanded to FANGMAN by adding on stodgy old Microsoft, Apple and Nvidia. These large-cap stocks have an undue impact on the major averages and pulled them higher.

If you ventured outside this trusty group, you did so at your peril. Beneath the beloved favorites, many stocks saw big jumps and then gave them back with a thud if the company missed a quarter.

The well-known prognosticator Mohammed El Erian has pointed out that a lack of drama helped equities move higher. (You coulda fooled me!) Oil prices made an orderly recovery to $60, or more than twice what they were selling for two years ago when oil bottomed at $25. Inflation remained tame due to the Federal Reserve Bank's excellent management of expectations and telegraphing of its intentions by Chairwoman Janet Yellen.

The dollar remained weak against other major currencies, fostering foreign trade. The U.S. economy continued to grow by 2.5 to 3.5 percent as it has for several years now. Unemployment was low. The consumer, who drives 70 percent of the U.S. economy, remained optimistic.

The tax bill was shoved through Congress in the waning weeks of the year. About 75 percent of its benefits go to corporations. The argument is that companies will repatriate their overseas stashes of cash and use that money to build U.S. factories, pay employees more money, increase dividends and buy back shares.

In reality, the problems we are fixing were created by corporations choosing to cut workers, close plants, move them overseas and use their increased profits to buy back shares and raise their dividends. If they didn’t do those things, a corporate raider might appear on their doorstep and threaten to dislodge management if it didn’t sell off divisions and use the proceeds for these activities.

It is not clear to me that we have had real economic growth in the U.S. in recent years. Most of the improved corporate earnings have come from clever chief financial officers' financial engineering to improve cash flow. That extra cash was used to buy back shares, shrinking the number of shares over which earnings are spread.

Now corporate earnings will rise just because companies are simply paying less in taxes. Net earnings will rise without improved operations.

If earnings drive stock prices — and believe me, they do — economic growth is unlikely to be choked off until interest rates rise to levels well above 3 percent. Estimates of aggregate corporate earnings are rising from economists coast to coast. That puts the price/earnings ratio back to a level where stocks are attractive again.

In the end, it is something of a Ponzi scheme of deception. But we all feel good about it until the next time we have to discuss how to pay off the budget deficit, which by best estimates is going to rise by $1.5 trillion.

For now, stocks are still climbing a wall of worry. At year-end, there were massive outflows from equity mutual funds, according to the Investment Company Institute.

My advice is to buy companies that weren’t on the big winner's list this year. I have written in the last few weeks about owning oil stocks and mid-sized banks. I’d add some disruptive tech stocks that have had good runs followed by major corrections due to a bad quarter in 2017.

Those are now selling nearer their lows for the year than their highs and there are dozens of them.

Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com and heraldtribune.com/topics/joan-lappin. She owns Microsoft stock.