2019

2019 Market Forecast

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It is that time of year. Prognosticators and pundits issue their forecasts for the year ahead. Wouldn’t it be nice to know what the future holds! Some forecasts are hedged, and don’t really say much. Our prediction is quite specific.

Many of those who have visited our offices know that we actually do have a crystal ball. It forecasts the direction of the stock market for the coming year. It does not say how far the market will go, but it always predicts the direction.

If you knew which way the stock market was going to go, could you make money investing?

Here’s the catch: our crystal ball has only been 74% accurate1. So perhaps the question should be, if you knew which way the stock market was going to go 74% of the time1, could you make money investing?

Without further ado, here is what my crystal ball says about the direction of the stock market for the year beginning January 1: it will go up.

Long-time observers will not be surprised. The crystal ball always says the market is going up. It has never predicted a down year. And checking back over the past hundred years, according to Standard & Poor’s, it has been right 74%1 of the time.

We don’t know how well its track record will hold up, but we believe this presents a favorable backdrop to buy bargains, avoid stampedes in the markets, and seek to own the orchard for the fruit crop. In other words, to keep on keeping on, following our plans and strategies.

It is tempting to include a discussion of the economy, the strengths we perceive, and the faint possibility of recession. We’ll leave that to people with more time on their hands. If your plans or planning will be evolving in the new year and require our attention, please call.

Notes and References

1. Online Data, Dr. Robert J. Shiller: http://www.econ.yale.edu/~shiller/data.htm. Accessed December 31st, 2018.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.

It’s a Whole New Ballgame!

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When a team came from behind to forge a tie in the course of a game, a certain sportscaster in the last century would exclaim “It’s a whole new ball game!”

Games begin tied, zero to zero. So in a sense, a game that becomes tied in mid-course is a new game. We get the same sensation from the start of a new year. The coming of the new year is a good time to reflect on the year just ending, and to think ahead about the year to come.

2018 was interesting, to say the least.

• From a high point in January, the market became choppy and volatile. Some of the bargains we own got cheaper. Account values shrank over the course of the year.
• Some corporate earnings and economic indicators were strong, and interest rates rose.
• LPL Financial, our institutional broker dealer, used its increasing scale to reduce our overhead and improve the technology with which we serve you.
• We added staff at 228 Main, and started projects that will improve things in the years ahead.

2019 awaits.

• We will work to uncover potential opportunities as the economic cycle unfolds, and continue to monitor our holdings on a regular basis.
• Sorting out how to house a growing business in the years ahead will be a bigger issue as time goes on.
• We will continue to add systems and understudies to improve the sustainability and durability of the business. (I still want to work to age 92, after all.)

Your own look back and look ahead are about your own challenges and opportunities. Clients, if you would like to talk about those, please email us or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.