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How Might The Market Behave In 2019?

28 Jan

By: Colleen Weber

News and Updates

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By Colleen Weber, CFP®, CPA

People are talking. They’re anxious to see where the market is headed. Maybe you’re one of those people, wondering what 2019 holds, what the economy will do, how you can prepare. Wishing someone with a crystal ball would show up to predict the year to come.

Unfortunately, there are no crystal balls. However, there are predictions. Quite a few of them, as a matter of fact. The problem is, predictions are just that—predictions. They aren’t proven. They aren’t certain. They aren’t facts.

They’re just guesses. Educated guesses, yes, but guesses all the same. So what does that mean for you? It means you should take them with a grain of salt. Hear them out, prepare yourself, be smart. But don’t make any rash decisions based on what some analyst says. That being said, you’re probably still curious about what they’re saying, so let’s take a look.

Farewell To The Bull?

Good things don’t last forever—a saying that rings especially true when it comes to the market. We are on the tail end of the longest bull market in modern financial history. But at some point, it’ll come to an end. Nobody knows for sure when the market will finally reach its peak for this cycle, but most analysts agree, we’ll continue growing in 2019. However, the market is expected to slow down near the end of the year as fear grows for a mid-2020 recession. Overall, the S&P 500 is expected to return single digits in 2019. Not great, but it could be worse. (1,2)

Gold Sees Growth

Gold saw its ups and downs last year. Starting strong and then falling mid-year, gold investors were left with an unpleasant taste in their mouths. However, things are looking up. With U.S. real rates peaking, the price of gold should be on the rise. Most analysts agree that gold will see significant returns this year. JPMorgan estimates as much as 15% growth, while Bank of America is predicting a more modest 5% return. (1,2)

Cash Crowned King?

Last year, Treasury bills took the crown, unexpectedly outperforming broad bonds and equity and commodity indices. Analysts believe history may repeat itself this year. With estimated returns of 3%, both JPMorgan and Goldman Sachs think cash will be a competitive asset class to stocks in 2019. (1,2)

Stock Sector Selections

With GDP growth expecting to wind down, analysts advise looking to sectors capable of weathering the storm. Ideally, you’ll be invested in sectors with high profit margins and a proven performance during slow market times. Two sectors recommended by Goldman Sachs that meet these requirements are the utilities sector and the technology and communication services sector. (1,2)

Next Steps

As I said, I can’t tell you exactly what the future holds for the market in 2019. But I can tell you the best way to prepare yourself. Analysts (and history) agree that an economic downturn is inevitable. It’s not a matter of if, it’s a matter of when. The good news is that with an expert in your corner to guide you, you’ll not only survive market volatility, but you can even thrive. When the market crumbles, that’s when savvy investors come out to play. Let me show you how to be one of those savvy investors. Book a free introductory meeting online or call (952) 470-0750 today.

About Colleen

Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.

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(1) https://www.ft.com/content/3c8475b4-f99f-11e8-8b7c-6fa24bd5409c

(2) https://www.cnbc.com/2018/11/20/goldman-sachs-2019-stock-market-outlook-raise-cash-and-get-defensive.html