Analysts are optimistic about stocks this year - January 23, 2019
Investors should keep their money in stocks this year, believes the global chief investment officer of UBS. The world’s largest wealth manager says that this year keeps great opportunities for investors. There are more and more anaylsts who share this belief. Let’s see their reasonings!
Investors should keep their money on the stock markets this year, believes UBS the world’s largest wealth manager. They have a very good reasoning behind this.
What does UBS say exactly?
“You have to stay invested, whatever your risk tolerance can bear”, believes the global chief investment officer of UBS, according to CNBC. He also believes that it’s unlikely that a recession will happen in 2019. There’s also a great chance of growing corporate earnings this year, even if it’s slower than before. This means that although there are market fluctuations, remaining invested in stocks is important.
Mark Haefele had another important advice to investors: they should diversify their assets. He also mentioned that investing outside of one’s home market is a great idea so they can shield themselves from local risks. This is in line with our most important advice to our advisors: diversification (or having a diversified portfolio) is the single most important thing an investor can have.
The price of getting out too soon
The UBS leader’s words about risk tolerance has a very important message, too. Investors without discipline often sell their assets at the first signs of market fluctuations. This behavior can hurt them financially. The global UBS leader gave an important example of the price of getting out at the wrong time.
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During Christmas Eve, we saw a sell-off on the markets due to some market fluctuations. If an investor sold their assets during this period and reentered the market now (when people are more optimistic), they missed out a 10% gain. They may even have to face a loss, since they sold their assets low and rebought them high.
We might add that while S&P 500 hiked 10%, it’s an index composed by stocks. Why is this important? Because several important stocks outperformed the index with a gain between 20-30%.
Others expect gains, too
There’s another analyst who is even more optimistic about 2019. We already wrote about how Blackstone’s Joseph Zidle said that “This is a buying opportunity. We see the market, the S&P 500, up 15 percent in 2019". He also believes that this is not a recessionary environment.
We also believe that 2019 might be a great year for investing. This is a good time to reenter the markets at very good prices. We also believe that staying on the markets and have discipline during fluctuations is also important. Why? Because in 2020-2021 we have a good chance of seeing new market highs, which means nice earnings for patient people.
Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.