Is it safe to invest in 2019? My thought on the stock market for 2019.
Is the stock market safe to invest in 2019?
Stock market is on a rally journey at the beginning of 2019 it continues and benefits from reduced interest rates and hopes for success in the trade war negotiations between China and the US. I dont think USA president Donald Trump would want the stock to fall, he wants to make America great again and one of the things on his list it to make a good trade buissnes with China.
Most of the Stock markets around the world are in bull mode. More then 80% of the stock markets fo the world are on plus this year. In some stock markets the gains are more then normal for a full year return. For example the Swedish stock exchange market have made more gain this one and a half month than it normaly does for a full year. Swedish stock exchange market have gained more then 11% (MSCI index).
So what are the main reasons for this good start?
Well one of the biggest drop before the end of 2018 was an increased concern of increased interest rates, the trade war with USA and China, and also the concern that we are leaving behind a strong 2018 and entering a 2019 with lower expectetions. When it turned out that interest rates will not be increased as much as people thought we where more calmer. Trump told us that negotiation with China is going very well and this gave more fuel to the Bull rally on the stock markets.
One thing missing to make the 2019 a good year:
If there is something missing for the stock market to be complete, it is that the economic picture must be brightened, especially in the European area and China.
Europe, or especially the European Union, is the really weak link in the stock market cycle. If at least Chinease goverment can help its stock market by throwing in stabilization money it could just be a livesaver for now at least.
What about the economy state of Italy, Germany, Sweden or the USA?
Italy has already fallen into technical recession after GDP growth has been negative for two consecutive quarters, and Germany just managed to avoid this fate when GDP growth in the fourth quarter last year managed to climb to zero. As you can see some countries in Europe are just hanging in a thin red line before being pointet with a finger and told that they are in recession or depression state.
In Sweden there are stronger signals that we are leaving stong years and entering recession mode.
In the US, on the other hand, the economy continues to chew on a really decent pace. In USA they have a strong labor market, the households are optimistic and falling petrol and energy prices.
What do you think? Will 2019 also be a good year? Some people say the good stock rally could hold on to even around 2020 in the USA. If you are a dividend hunter the stock market weather is nothing you should be scared of. Recession comes and goes aways, good companies will survive.
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Historical returns are no guarantee of future returns.
An investment in securities / funds can both increase and decrease in value and
it is not certain that you will return the invested capital.
The return may also increase or decrease due to changes in the exchange rate.
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