There’s an old investing phrase, “No one ever made a dime panicking.” The pieces are in place for the market to deliver a positive performance again this year, but when the path gets bumpier, make decisions aligned with your financial goals, not emotions or headlines. While not necessarily too far or fast, this market has come quite a ways in a short period. A good offense and defense can help long-term investors navigate both the ups and downs that may lay ahead.
We expect growth to slow in 2020 to just below the 10-year expansion average, with no catalysts such as tax cuts expected to reinvigorate growth. We expect consumers to fuel the economic expansion. In addition, interest rate cuts enacted last year should provide a modest support to the economy in the first half of 2020
While headlines and uncertainty influence short-term moves, markets take direction from fundamentals, not foreign affairs, over broader periods.
Stocks finished the year up 32% in 2019, the best annual performance in half a decade, led by technology which returned 50% in 2019, more than double the sector’s five-year average1. Lower returns and more volatility are expected this year. So, if 2019 came and went without you refitting your portfolio to your risk tolerance, it may be time to make sure your allocation to equities reflects your comfort with the risks of a loss, or to make sure that you are not overinvested in any one sector or asset class. In a globally integrated world geopolitical risks tied to investing are impossible to avoid. S&P 500 firms make 38.3% of revenues overseas while small firms composing the Russell 1000 firms make 37.1% of revenues off US soil2. The greater risk for long-term investors, however, is to get off course from your overall investment strategy and letting short-lived events derail long-term results. To stay the course through the uncertainties of 2020 and beyond, work with us to develop a disciplined approach to investing that helps you achieve your long-term financial goals.