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2019 is winding down, and it’s been an eventful year so far. The volatility that picked up late in 2018 continued through much of this year, while 2019 has seen the emergence of new issues as well. What’s in store for the markets as the year ends?
The market experienced wide swings during the third quarter, hitting all-time highs in July, pulling back in August on trade and recession worries and then rebounding in September to finish the quarter back near the highs. With the spotlight bouncing between good news and developing risks, the fluctuations were driven by a few factors:
All told, the stock market is up more than 15% so far this year, but the path higher has been choppy. Looking ahead, as we move through the remainder of the year and into 2020, we think the fundamental backdrop remains favorable for investors, but a list of risks that includes lingering trade tensions, uneven global growth and political uncertainties like Brexit and the upcoming U.S. election means periodic pullbacks should be anticipated.
Our outlook includes the following key views:
The positives still outweigh the negatives at this stage, but the risks shouldn’t be ignored:
We don’t anticipate a repeat of 2018’s end-of-year selloff, but we do think these prevailing risks will prompt pullbacks as we move through this year and into 2020.
Our investment outlook remains fairly positive, but the path ahead won’t be smooth. When you see headlines about a drop in the S&P 500 or the Dow, remember that with a diversified portfolio:
If market swings have you concerned, talk with your financial advisor to ensure your portfolio is properly balanced in alignment with your comfort with risk and long-term goals.
This information is for educational and illustrative purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation.