Succeeding in the Investment Game in 2019
With 2018 now done and dusted, questions surrounding the stability of the markets in 2019 is a topic that is hot on every investor’s lips, and has left them wondering what the stock market correction of the past three months will bring? Well it may be a little premature to make any rock-steady predictions about the future of the markets in 2019, the ending of 2018 will bring with it either a treacherous 2019 off the back of the correction, or a possible launchpad for a new bull market as the year moves forward.
While smart investors should be keeping their eyes firmly fixed on what the market is actually doing at any point in time, there are a few critical factors whose influence on the market can determine the behavior of stocks, as well as their performance. Let’s take a look at these factors, and how you can successfully navigate these variables to prepare for what 2019 is going to bring.
Stock Market Volatility
As 2019 begins and the trade war, Treasury yield anxiety, and other risks of 2018 pass us by, the market must pick itself up from its worst correction since 2011. Volatility set much of the tone for 2018, the markets showing twice as much as was seen in 2017. The current outlook on the “market in correction” is for investors to stay in cash as much as possible, while exercising their patients in waiting for a bottom. The silver lining in this situation, is that this big correction helps the market to remove any excess froth, instituting new waves of buying, and thus igniting the fires for the next bull market. Even though the markets have not been this bad in years, there are still no signs of reaching the super-bear market conditions that were found back in 2008.
World Stocks vs U.S. Stocks
It is both the strengthening and weakening of U.S. economy and those economies of other developed countries that determine the forecasts for the future of the stock markets. And although the U.S. stock market ended badly in 2018, they still managed to outperform the vast majority of other world indexes. The U.S. in 2018 boasted a much stronger economic performance, as well as corporate profits far exceeding their developed country competitors, indicating that the same could happen for the upcoming year. Investors Hangout is a great site to keep your finger on the pulse regarding market changes and movements, helping to keep you ahead of the game. Central Banks are another influential factor to watch as the Japanese and European accommodative monetary policies can play a huge factor in influencing the markets as a whole. By as early as next summer, the U.S. economic expansion is set to become the longest on record, forecasters putting the chances of a U.S. recession at only 24% for 2019. And let’s be honest, the less the chances of a recession, the less likely the market is to stay in bear territory.
For investors, keeping an eye on the daily movements of stock indexes is vital in knowing which sectors form a solid base and which are on the up-and-up. Investors should be vigilant regarding stocks that have good earnings and sales growth, paying special attention to those that are performing better that the market as a whole. These are the stocks that are going to make big gains in the future by becoming early leaders in the next upturn. Just like a market signals its tops, it does the same when reaching its bottom, and all the signs are there. All you have to do, is take advantage.