While 2018 started with a bang, it quickly became a bumpy road for investors. CNN even described 2018 as “the worst year for the stock market in 10 years”.
Following massive gains in the stock market in 2017 and due to investors’ expectations regarding the outcome of corporate tax cuts in the U.S. and the strong global growth, U.S. indices recorded their highest level ever in 2018.
However, this spike didn’t last as index values fell soon after only to increase again between April and August/September (while recording new highs) before tumbling down once more.
Of course, there is more than just the stock market.
In 2018, there were opportunities to make money in every asset class, especially commodities, currencies, and individual shares.
So, what about 2019? What should we expect from the markets and ultimately, what will be the best assets to invest in?
The oil market was volatile in 2018.
While oil prices evolved in a relative uptrend last year, they followed bullish and bearish phases between January and October, only to crash and lose more than $30 in December. That month, oil prices reached their lowest level since June 2017, but they have since bounced back about $15, gaining approximately 30%.
There is still a crude oil supply glut and fears of a global recession are increasing, ultimately weighing on oil demand. These factors are expected to increase volatility and add pressure to oil prices in the upcoming months, making room for plenty of trading opportunities.
Forex: EUR, GBP, and USD
With the current trade war, the American protectionism policy, the weakening of European growth and Brexit, the Forex market is a great place to invest your money in 2019 – especially when it comes to Forex currency pairs linked to the EUR, GBP and USD.
The Forex market is mostly influenced by the central bank’s monetary policy, in particular, decisions on costs and the availability of the money in a given economy.
However, daily movements are triggered by economic news and the risk appetite of investors. It’s therefore important that traders monitor any central bank meetings and decisions, as well as economic calendars to keep an eye on any changes.
Individual stocks: value over growth
Value investing involves identifying companies whose stock prices do not reflect their fundamental worth. It means that they are usually less expensive in comparison to their profits.
You might want to consider value stocks rather than growth stocks this year, as investing in value stocks has proven to deliver better returns over the long-term.
The recent peak in market volatility has been crucial for investors with long-term horizons as it has created many large trading opportunities. Bear in mind that every crisis and bear market is also an opportunity for wise investments.
To make the most out of 2019, be prepared for a bumpy road but stay calm.
You should reassess your goals and risk appetite and fine-tune your trading method with strong risk and money management rules. Most importantly, however, try to establish a diversified portfolio and always stay on the lookout for more opportunities.
If you’re interested in diving into the Forex market, currencies are probably one of the most interesting assets to trade in 2019. We may have mentioned some of the most powerful and popular currencies in this post, but it’s also recommended that you look at other emerging market currencies, too.