2018 has not been a great year for stock investors as the markets mostly remained unsettled by trade war tensions and concerns relating to Brexit. So far this year, the Dow Jones Industrial Average is up a modest 1.8% and the S&P 500 index has risen just 1.3%. Nasdaq performed a little better, increasing 3.6% in the year-to-date period.
Investors mostly remain cautious going into 2019, thanks to bearish sentiments that have seeped into the markets in the latter half of the year. However, experts are of the opinion that there is plenty of scope for growth in the coming year, once armed with a few helpful ideas.
A few experts are of the opinion that investors should start considering Chinese e-commerce companies such as Alibaba (BABA) and JD.com (JD) as they are primed to outperform their US counterparts. They feel the only downside about these high-potential stocks is the stand-off between the US and China.
If 2019 paves way for a better trade relation between both the countries, the Chinese firms would benefit highly.
Bonds are generally considered a safe haven to invest. But it might not be the case going into 2019. The Fed’s move to increase rates have already started affecting bond performance negatively. With three more rate hikes projected in the near future, your bond portfolio is something you probably need to reconsider and trim.
Cash in on currency
Thanks to a strong US dollar, local currencies of emerging markets are near 2016-levels. The US dollar is likely to weaken next year, driven by a spike in the US federal deficit, leaving plenty of room for growth for the local currencies. Hence if you are reluctant to put your money into stocks fearing an extension of the bearish sentiments, this could be your choice.
Happy investing in 2019!