Eight reasons to be optimistic about 2019

2018 has been a tough year for investors, with negative returns across most equity indices, the collapse of oil prices, the Emerging Market’s currency meltdown and surging corporate bond spreads just to name a few problems.  As a result, there is plenty of news heralding the end of markets for 2019 and a decent amount of fear out there.

We can’t be certain about what 2019 might bring, but we do know that news flow is often affected by market movements. During episodes of rising prices the market tends to focus on positive news while ignoring negative news. Meanwhile when prices are falling, like this year, the focus turns to bad news and positive news tends to be ignored.  It is important to set aside market sentiment and look to maintain an unbiased perspective. So, to help, here are a few things to make you more optimistic about the outlook for 2019.

1. Ambiguous US economic data

There is plenty of discussion around whether the US is approaching a recession.  However, recession indicators are far from aligned.  As an example, since the 1950s, a turn-down in the Conference Board Leading Economic Index has been a very reliable indicator of an oncoming recession, peaking on average 6-8 months before.  There is currently no sign of that yet.