As we countdown to 2020, Some Key Takeaways for Investors
Editor's Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It’s a showdown of global proportions, so don’t miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.
(Kitco News) - This week I had the pleasure of attending Wells Fargo’s annual outlook and a few key things stood out as we countdown to a new year and decade.
Firstly, investors had a lot to be thankful for in 2019, there were 100 new highs on major indices, the fixed income market gave us three to four years of returns in one single year, U.S. unemployment is at a 50-year low with wages up, north of 3%, and gold saw its best year after a long, tough six years.
“2019 was largely characterized by a tug-of-war between substantial geopolitical drags and offsetting global monetary easing. The third slowdown of this expansion took hold at midyear, once again creating concerns about the timing and cause of the next recession. Ironically, almost every asset class this year has delivered positive returns, despite these concerns,” said Darrell Cronk, chief investment officer for wealth and investment management of Wells Fargo.
This year we also saw a real pivot on the central bank front with over 50 interest rate cuts by global central banks. Most experts we speak to believe that a low interest rate environment will continue to be the norm in 2020.
Two wildcards we will continue to observe are the ongoing U.S.-China trade talks, which this week seems to be stalled for quite some time with President Donald Trump saying he does not see a resolution before the election.
But with November's strong job gains, a few experts feel that the positive numbers could delay any U.S./China trade agreement, as signs of a stronger U.S. economy will embolden U.S. negotiators. The positive jobs data could rally the equity markets going into year-end.
CNBC’s Jim Cramer on Friday contributed to the no-deal idea, noting: “The president can walk away from the table with this number,” he said.
And of course, the second wildcard being the presidential election. A look at history shows that presidential election years have generally produced positive equity results. Since 1928, only 4 of the 23 presidential election years have experienced negative S&P 500 index returns. Three of those four occurred during recession years.
We will leave you with that as food for thought. This will be our last newsletter of the year since we are launching our 2020 Outlook next week.
We have some incredible interviews lined up for you. So be sure to stay tuned and find out where Kevin O’Leary, Peter Schiff, Peter Hug, Gerald Celente, Doug Casey, Jim Rickards and some other fan favorites are investing in 2020!
I know it’s early, but I want to wish those celebrating, a very Merry Christmas and a safe and happy holiday season.
On behalf of my colleagues, I thank you for your trust and support in the Kitco News team.
Happy and Successful Investing in 2020!