Longest U.S. Expansion in History
We expect GDP growth to slow to a range of 2 to 2.5 percent, and believe the U.S.economic expansion will continue to June 30, 2019, making it the longest (10 years) economic expansion without a recession.
Positive Signs in the Labor Market
We expect the unemployment rate to reach a new low this year and wage growth to approach 4 percent. To sum up the employment situation in this country, currently the number of job listings exceed the number of people seeking employment.
Tech, Financials, and Healthcare Outperform Utilities, REITs, and Materials
We like tech stocks’ strong earnings growth, balance sheets and valuations. Some mutual fund portfolio managers were negative on financials last year, but these companies now have better balance sheets and are cheap. And finally, despite recent strength, we think health care stocks are the defensive sector showing the best earnings growth prospects.
2020 Presidential Politics Heat Up
The 2020 presidential campaign will come to the forefront this year, and we expect the number of Democrats running for the top office to reach double digits. Meanwhile, President Trump could experience a challenge from within his own party. 2019 will be a banner year for cable news junkies, but let’s hope politics don’t cause significant damage to the economy and markets.
We prefer large company over small company equities, companies with pricing power, cash on their balance sheets, the ability to grow dividends and less leverage. Within fixed income, we prefer an emphasis on short-term (1-5 years) investment-grade corporates and municipals across the curve. We don’t expect market volatility to subside anytime soon. So,invest in high quality, well managed, world-class companies attractively valued after December’s market meltdown. The wholesale repricing of assets has afforded investors an opportunity to rebalance portfolios.
Stanley K. Evans, CRPC®, AIF®
Chartered Retirement Planning Counselors℠
Accredited Investment Fiduciary®
Registered Investment Advisor
300 Second Ave, Ste D
Gallipolis, OH 45631
(740) 446-4200 – Phone
(614) 595-1156 – Cell