2018 was marked by intense market volatility. Trade concerns and the end of loose monetary policy have led to severe market gyrations. What does 2019 herald for investors? According to Mark Matthews, Head Research Asia, market conditions in 2019 could be challenging, but attractive opportunities still exist.
Danish physicist and Nobel laureate Niels Bohr famously commented “prediction is very difficult, especially if it’s about the future.”
The end of unconventional monetary policy has certainly given rise to uncertainty. Following volatile market conditions in 2018, markets appear to be entering a more uncertain phase in 2019.
Nevertheless, we maintain the view that the fundamental outlook remains positive and it is worthwhile to stay invested. Being invested in financial markets pays off over the long run. Since 1927, the S&P 500 Index has risen by an average of 9.3% annually.
Amid a rising interest rate environment, we suggest focusing on cyclical sectors and quality growth stocks. Across regions, high quality stocks in Europe, particularly Switzerland, represent a store of value. In the age of digital disruption, prospects are bright in three key fields of disruptive technology –digital commerce, digital payments and cloud computing.
In light of the ambiguity in market sentiment, investors may wish to consider alternatives to traditional equities and fixed income assets, such as funds invested in direct real estate and equity long/short strategies.