We’re only a few days into 2019, but it appears markets have picked up exactly where they left off.
There is growing uncertainty and volatility almost everywhere, and individual events are starting to become catalysts for sell-offs or rallies. Whether it’s Apple’s recent profit warning or Fed chair Jerome Powell saying that he is “listening closely” to the markets, investors are taking cues from current events to figure out where the herd is grazing.
It’s hard to say where markets will head in 2019 – but before we get into the nitty-gritty of a new year, it’s worth taking one final look back at 2018 to see how it impacted investors.
How Markets Did in 2018
We’ll start with broad asset classes, including stocks, bonds, commodities, and cash:
Note: Figures for equity markets are not including dividends
As you can see, it’s mostly a sea of red.
Cash turned out to be best option for the year, and several asset classes were crushed over the course of 2018, including crude oil and nearly all stocks. Despite this, large cap U.S. stocks (S&P 500) had no issues in outperforming equity alternatives, like smallcap stocks, foreign stocks, or emerging markets.
Breaking down the S&P 500 further into its sectors, it’s clear that nearly every industry struggled simultaneously.
Energy (-20.5%) and Materials (-16.4%) sectors were the hardest hit, and even the Technology sector eventually capitulated by the end of the year. Amazingly, Apple was considered a $1 trillion company in August, but today the tech giant’s market capitalization has already dropped down to a measly $700 billion.
The one exception to the general trend in S&P 500 stocks was Healthcare, which posted 4.7% returns over the course of 2018. Companies like Merck, Eli Lilly, and Pfizer all saw their stocks grow by double-digits, and it’s possible the sector could stay strong in 2019 as the world continues to age.
Lastly, here’s how major currency markets fared.
The U.S. dollar was the strongest major currency, and the Japanese yen had an impressive year as well. The Aussie dollar was routed, and now sits at 10-year lows.
Winners and Losers
Lastly, here’s an ad hoc list of some of the biggest winners and losers in 2018 – it includes some of the stocks and assets that saw notable gains or declines over the course of the year:
Interestingly, it was the finer things in life that outperformed most major asset classes. Both fine wine and fine art gained close to 10%, leaving most other indices behind in the dust.
AMD had a roller coaster year, finishing up nearly 80% as the biggest winner on the S&P 500. That said, owners of AMD stock may see things differently: the stock had actually tripled by September, and has fallen precipitously ever since.
Given the above recap, what are you investing in for 2019?
I was heavy on cash, loans to business owners against owners assets and collector cars. So far, so good. Classic cars, I believe, will go soft and I will be unloading.
2019 will include a doubling down on a personal business investment.
What am I investing in, in 2019?
A seat on the sidelines.
Questioning whether I can scrounge up enough for a sack of popcorn to mou, watching the carnage.
Pay down debt.
Stash any savings possible.
Resist the strong urge to buy more stuff, more leisure time vacations. But, I may need a car soon, dammit.
Watching to see if the twin running backs on my team, Silver and Gold, get tackled for more losses,
simply get back to the line of scrimmage, or start showing some juke & moves, and positive yardage.
Sitting on a wee lil’ bit of cash reserves, watching also the IRA, SEP, 401k, to see how bad their injury report is going to be, after the game is over, or called due to weather.
Can’t bring myself to dissolve the pre-tax monies going stale in those funds, take the penalty hit from Sam, and if I eventually do strap on a set, wondering where would be the safest place to put divestiture funds…more cash? More into metals?
A rental property?
A healthcare stock? (should have seen that opp…costs keep focking rising…is there any end in sight to that gang bang by the hospital and insurance CFO’s? Kiss my ass. It’s hurting.
Peer to peer lending is intriguing, but proper vetting of the borrower would be a must.
Any agreement, put in writing, with pledge (nay, posession) of the collateral they offer up in good faith.
Based on another stat from the article above, if I would have bought fine wine, it’s increase in value would not have brought me a return on my investment.
It would have been consumed and enjoyed, so I look at that purchase as an expense, not investment.
Art? Pshaw. Not good enough to dabble in that game. However, if I would have known how mucked up society was going, and where it was headed, we could have bought one of those disgusting creations from Mapplethorpe, or whoever supplied Tony Podesta the garbage and evil he called art. But, no, sorry.
My ethics and conscience wouldn’t have allowed that; investment profit or not.
Wait! I’ve got it!
Weed!
Anybody invested in any pot stocks?
That looks like a trend going down a one way street forward.
Hell, the local municipalities are on board, because it’s REVENUE.
Aside from stoned drivers, I doubt the cops are too worried about Cheech and Chong types resorting to violent crime and robbery, like the meth heads. Stoners are only looking for another bag of Doritos to steal.
…and so it goes.
Dude, calm down.
I invest in anything that POCB’s cant manipulate
They live off debt . so no debt .
You must define what are wants and needs .
Navigate accordingly .