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Posted on January 2, 2019

How Might The Market Behave In 2019?

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Published by Ryan Cooley

The end of 2018 brought with it some downward market trends, but what’s in store for 2019? It’s exciting to watch analysts make predictions for the coming year, but it’s important to remember what they are: predictions. These people are experts at analyzing trends, not fortune tellers. Sometimes they’re right, sometimes they’re partially right, and sometimes they’re dead wrong. With so many variables to take into consideration, 2019 is especially uncertain. Will it be the year we finally transition out of a bull market? What sectors are expected to over- and under-perform? What can you do to prepare yourself and keep your wealth safe? Let’s take a look at what the analysts are saying.

Bull Or Bear?

Most analysts believe that we will continue with a bull market throughout 2019. However, there are predictions of rough times ahead, and we can expect some increased market volatility. Some even foresee a recession by mid-2020. The fear of this depression will likely have a negative impact on the market by late 2019. All in all, many believe the S&P 500 will produce single-digit returns in next year. (1,2)

Gold Will Grow

After a strong start in 2018, gold prices suffered in the second half of the year. However, due to peaking U.S. real rates, the price of gold is expected to rise in 2019. However, analysts disagree just how much it is expected to increase. Bank of America pegs gold appreciation at 5%, while JPMorgan estimates up to a 15% return.1,2

Cash As A Competitor

In 2018, Treasury bills outperformed broad bonds and equity and commodity indices. As unheard of as it sounds, both JPMorgan and Goldman Sachs believe that cash will be king again in 2019, estimating returns of up to 3%. This predicted return would make it a competitive asset class to stocks for the first time in several years.1,2

Strong Stock Sectors

As far as stock picks go, Goldman Sachs recommends looking at the utilities sector for 2019 due to its notable track record during times of stunted GDP growth. In addition to utilities, Goldman also likes the technology and communication services sector. Despite the downward trends that began in October, these high profit-margin sectors are likely to be more sustainable during challenging economic times.1,2

Next Steps

We are nearing a turning point in the market. It’s impossible to predict exactly when it will happen. Whether it happens in 2019 or not, one thing’s for sure—you need to be prepared. You need to have a plan in place. There is no room for rash decisions. Everyone is going to have an opinion, and everyone is going to try to give you advice. A lot of it will be wrong. The best thing you can do is seek professional guidance from a financial advisor you can trust. We at Jacob William Advisory are here to help. If you’re interested in setting up a “2019 market transition” plan, contact our office by calling 410-821-6724 or emailing info@jacobwilliam.com. You can also take our Risk Tolerance Questionnaire at https://client.jacobwilliam.com/survey/.

About Ryan

Ryan Cooley is an associate Wealth Advisor at Jacob William Advisory, a wealth management firm whose sole mission is to serve their clients’ needs beyond their expectations. Ryan has a military background as a U.S. Army Infantryman, and he applies the values and character traits he learned through his experience to his role as a financial advisor. To this day, Ryan is passionate about veterans’ issues and holds a seat on the Advisory Board for Operation Second Chance and is a lifetime member of the Disabled American Veterans organization. Ryan obtained his bachelor’s degree in economics and his MBA from the University of Maryland. Outside of the office, Ryan enjoys spending time with his wife, Germaine, and their two wonderful children. He currently resides in Urbana, Maryland, and loves to fish, hunt, cook, watch Maryland Terrapin sports, and cheer his son and daughter on in all of their activities. To learn more about Ryan, connect with him on LinkedIn.

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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