Investors who have written to me are excited about President Trump’s proposed tax plan. The kicker is that any tax relief would come on top of good company earnings (so far) this earnings season.

I’ve been asked for an optimistic long-term target for the U.S. stock market. So here it is: Dow US:DJIA 30,000 in five years. However, investors are well-advised to review all scenarios, not only the optimistic one.

The Trump tax plan

Trump is expected to unveil basic principles of his tax plan Wednesday. He wants to cut the corporate tax rate to 15% from the current 35%. He also will propose a 15% rate to be used by pass-through entities, compared with the top current rate of 39.6%. American corporations have stashed over $2.6 trillion of earnings abroad. For repatriation, he will propose a 10% tax on foreign earnings.

If enacted, these changes would be very positive for the economy. Trump’s tax plan would boost gross domestic product (GDP), though tax revenue would initially fall. Let’s examine this issue with a chart.

Chart dating to 1950

The chart shows GDP growth going back to 1950. Trump has been talking about 4% growth in GDP, which, as you can see, is a tall order. It’s been attainable in the past, but not so much recently. Still, even if Trump doesn’t meet his own goal, the economy — and corporate earnings — would benefit.

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The biggest factor

The biggest single factor in the long-term direction of stocks is earnings growth. The fundamental case for Dow 30,000 has strengthened as risks have receded in Europe and amid excellent earnings from Dow Jones Industrial Average components Caterpillar US:CAT, E.I. DuPont de Nemours US:DD, McDonald’s US:MCD, 3M US:MMM and American Express US:AXP

The Arora Report estimate for the S&P 500 Index US:SPX — often traded using the SPDR S&P 500 US:SPY — is $137 per share. According to the Arora Report’s analysis of Trump’s proposals, tax cuts could add about $13 to S&P 500 earnings. Deregulation could add another $7. If gross domestic product growth were to accelerate to 4%, S&P 500 earnings could reach as high as $190 a share in about five years.

Read:A big chunk of the Dow’s gains have come from earnings

Given the potential growth in the economy, in spite of the Federal Reserve’s plan to raise interest rates, the price-to-earnings (P/E) ratio may stay in the range of 18 to 21. A P/E of 20 applied to $190 in earnings leads to 3,800 in S&P 500. (The benchmark index as of this writing is 2,383.)

For the Dow Jones Industrial Average, that translates to reaching over 33,450 by the end of 2021, Trump’s first term. (The Dow is at 20,996 as of this writing.) Allowing for some hiccups, Dow 30,000-plus is doable.

Big risks

Even if the Dow reaches 30,000, the trajectory wouldn’t be a straight line. To be sure, there are big risks. Trump might not be able to execute his plans, and he might start a trade war. Another risk is that the Federal Reserve ends up raising interest rates too quickly, eroding company earnings. In addition, there’s a chance a recession could occur before Dow 30,000. A recession could result in a year-long bear market.

Holy Grail

Under this scenario, the stock market would be a strong trending market from a long-term perspective. And in a strong trending market, the Holy Grail is to buy stocks with good fundamentals as prices dip.

Here are 10 stocks already in The Arora Report portfolio investors should consider buying on dips: Applied Materials US:AMAT, Bank of America US:BAC, E*Trade Financial US:ETFC, Expedia US:EXPE, Facebook US:FB, Intel US:INTC, J.P. Morgan US:JPM, Royal Dutch Shell US:RDS, T-Mobile US:TMUS and Walgreens Boots Alliance US:WBA. We provide specific recommendations on buy zones to buy on dips, recommended quantities and target zones for each of these stocks to our subscribers.

It is important to hold a fair amount of cash at this time. Otherwise, when the market falls, you won’t have money to buy these stocks at better prices.

Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. All recommended positions are reviewed daily at The Arora Report.

Nigam Arora is an investor, engineer and nuclear physicist by background, has founded two Inc. 500 fastest-growing companies, is the developer of the adaptive ZYX Global Multi Asset Allocation Model and the ZYX Change Method to profit from change in trading and investing. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.