skip to Main Content
enquiries@thearmchairtrader.com

Sign up for our Free Daily Digest newsletter: Actionable insight every morning, designed for the self-directed investor. Find out more

Investors will be feeling more than a little gloomy about the 2019 investment outlook, but according to Nigel Green, founder of deVere Group, there is still a possibility to make decent returns in the New Year. He sees three key tailwinds which he thinks will help to drive positive investor outcomes.

2019 investment outlook – the good news

First, following stock market falls in recent months, valuations are attractive in many sectors and countries, relative to the returns on cash and likely corporate earnings growth. Emerging markets in particular are considered to be offering value.

Second, global growth expectations have been reduced in recent months, but with global GDP growth in 2019 likely to be 3% plus, deVere is expecting continued corporate profits growth in many of the major economies and in particular in the US.

“The Federal Reserve has signaled that next year’s planned interest rate hikes may be delayed if economic data weakens, which last week’s relatively modest payrolls data and November’s inflation data suggests is the case,” Green says. “Should the Fed push back raising rates, this will help support the US, and therefore global economy.”

Thirdly, deVere also thinks that the world’s financial system is in much better condition. Banks and other financial institutions have significantly enhanced their capital levels over the last decade, making them more capable of withstanding defaults on loans.

This all goes some way to supporting a positive 2019 investment outlook.

2019 investment outlook – the warning signals

DeVere also sounded a cautionary note about some of the wild cards in the deck. For starters, there is the ongoing trade dispute between the world’s two largest economies, followed by higher US Treasury yields, which will raise the risk-free rate of capital. There is also higher inflation to consider and the threat posed by Brexit.

“History teaches us that stock markets go up over the long term, so I would urge investors to remain invested,” Green says. “No one wants to miss out on returns.”

DeVere recommends that investors remain diversified across all asset classes, sectors, regions and currencies. It is considered the best way to mitigate risk and take advantage of opportunities in the market.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Comments

Back To Top