Market Watch 2019: The Year Ahead

Posted 30 Jan 2019 by Rick Irwin, CFP, CLU

In contrast to last year’s consensus outlook that pointed to a synchronized global economic expansion, many experts now believe we are in the late stages of the economic cycle, with global growth slowing and downside risks increasing. Nevertheless, developed economies are expected to grow throughout the coming year and inflation remains moderate. Global interest rates are low by historical standards, allowing corporations the flexibility to strengthen their balance sheets and invest in the future of their businesses. These conditions suggest a cautiously optimistic outlook for markets in 2019.

Our advice: stay diversified, and invest for the long term

It can be difficult to set aside short-term distractions and maintain a long-term perspective when negative headlines dominate as they have in recent months. But looking back over the longer term, the most recent market decline can be seen as a setback in a strong run upward.

I believe the most important action to take as an investor is to create a sound, diversified investment plan that takes your time horizon and tolerance for risk into account, and then to stick to that plan through periods of short-term volatility. As asset classes do not typically perform in a correlated fashion, diversification can help to insulate your portfolio from the highs and lows, and provide a smoother experience over time.