Baked in Uncertainty for 2019
Top 5 of the Week of January 28th
In our Top 5 this week, from Pension Partners, Charlie Bilello considers how paradoxical markets can be. Jeff Desjardins of the Visual Capitalist reveals which will be the largest 10 economies across the globe in 2030. And A Wealth of Common Sense’s Ben Carlson examines what 2019 will bring for certain.
Mark Rzepczynski, on his blog, helps us work out when to stick with the facts and when not to. And Morningstar’s Christine Benz shares her own predictions for 2019…
“Strength Begets Strength”
- The middle of January has seen the market switch from being majorly oversold to majorly overbought thanks to December’s extreme sell-off
- When a market is in such an oversold state it “tends to bounce” back to a mean reversion (which is exactly what happened this year)—which is why momentum will also rally the market from being overbought too
- Such is the great paradox of markets that both scenarios lead to above average gains
Closing the Great Divide
- The next ten years will no doubt see radical growth within Asian economies
- In addition, today’s current emerging markets will be front and center driving forces too as seven of the world’s ten largest economies
- Each countries’ contribution to the world GDP will ultimately merge with their percentage of the global population as the gap between modern and developing places closes up
Baked in Uncertainty for 2019
There’s no way to reduce the uncertainty about what the future holds for us all—whether it’s politics, the world markets or events—but it’s probable that a few things will happen:
- Your gains from last year will impact your moves and decisions within this year’s markets
- After the shock of how 2018 closed, it will feel more secure to wait and do nothing this year
- It’s all about asset allocation rather than security selection moving forward
What are you certain about in 2019? Share your comments in the section below
Facts First, But Don’t Live By Them
- The start of a new year is often filled with prophecies about what may or may not happen ahead—sometimes though we get wrapped up in too many facts
- While curious and engaging, sticking to the facts to plot a course ahead can set you off in the wrong direction
- Interestingly enough, cash outperformed nearly all assets last year but that doesn’t mean it will happen this year—or that you should make changes to adapt to it either
Making a Sound Financial Plan
- It’s always a mistake to try and make market predictions to help balance out your assets and securities
- But even the most long-term tactical investor needs to work from some type of forecast in order to come up with a sound financial plan
- Because without a plan, you can’t know whether to make retirement your single focus or to divert and aim for other financial targets—just be aware of which investment horizon you’re targeting when looking at forecasts
Top 5 of the Week is a summarized collection of financial investment articles that we like and think you might like too. Having written thousands of pages of equity strategy and company research between us, we understand the allure of the ever-changing world of finance. Investing is an art form—and like everything, something you can work on and improve at. There are some excellent writers out there on the finance web, some offer a running commentary on today’s market, some are doing research, some have tips on how to Become a Better Investor, and some just lift the cloud of fog behind a lot of financial jargon. Each week we will keep you up to date with the top 5 articles worthy of your attention.
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