Stock Market Outlook Until End Of 2019
So far, 2019 has been a volatile one for the stock market, with several major surprises along the way. But now that 2020 approaches, most investors are wondering what the final quarter of 2019 will look like for the market as a whole. Every year’s fourth quarter sees a few unexpected moves, but with several major international issues currently in the works, most analysts say they year could end with a major rally or a moderate downturn.
What does that mean for everyday traders? The key takeaway is that year-end months might be a good time to put a portion of your portfolio into precious metals stocks or ETFs. Likewise, when something as important as U.S.-China trade talks are ongoing, and could affect the market for better or worse depending on their outcome, a number of investors opt to stick with cash or government securities until the new year begins.
Here are a few strategies that savvy traders do when faced with uncertain times:
Stick with Blue-Chip Stocks
Whenever the stock market acts up, a certain percentage of investors exchange their riskier holdings for blue chip stocks and similar instruments, like treasury bonds or treasury notes. It’s a simple safety maneuver and has been a standard tactic of all the investment funds for decades. It’s like moving all your fine china into the basement when a major storm will approach.
You can always switch from stocks to contracts-for-difference (CFDs), or from options to stocks, or make any other trade you prefer when you work with brokers such as easyMarkets. The advantage of working with an established broker can’t be overestimated. When the market threatens to take a dive or even a big upswing, you want to have the opportunity to change your account structure.
Consider Precious Metals as a Hedge Against Volatility
One of the oldest protective strategies for those who are invested in the stock market is to purchase precious metals. In most situations, the primary metals move against the mainstream market. So, when stocks take a drubbing, gold and silver usually go up. That doesn’t mean you need to split your entire portfolio in half. A smarter move is to keep about 5-15 percent of your total portfolio in metal stocks, metal ETFs or in bullion. That way, you have a least a modicum of protection when things go bad with stocks.
Know the Major New Issues Affecting Stocks
Right now, there are two core issues having an impact on the Dow and S&P indexes.
- The outcome of ongoing trade talks between China and the U.S.
Recent tariffs imposed by the U.S. on a variety of Chinese goods have led to problems in the once-stable trade relationship between the two trading giants. Keep an eye on year-end agreements and daily news reports about whether the U.S. agrees to remove tariffs as a good-faith gesture.
- The U.S. election won’t take place until November of next year, but the Democrat Party primaries are set to begin.
As happens in many election cycles, the party might settle on a favorite candidate before 2019 ends. If that happens, the stock market will react in due time and eventually settle down. For market-watchers, remember this: the sooner the Democrats choose their candidate, or at least seem to favor one person, the more it could affect the stock market.