After Rocky Year-End, Risks Follow Investors into New Year

This week, Craig Siminski, of the Equity Design Group, shares with us on a timely topic for the beginning of 2019.

In the final quarter of 2018, interest rate and growth fears, along with geopolitical events, sparked volatility in the financial markets and reversed many of the outsize stock gains notched earlier in the year. The S&P 500 posted a loss of about 6.2% for 2018. After falling into bear market territory, defined as a drop of more than 20% from recent highs, the tech-heavy NASDAQ was down 3.9% for the year overall.

For the first time since 2008, all three of the major U.S. stock indexes (Dow, S&P 500, and NASDAQ) were set to record annual losses.

Investors may feel shell-shocked after the most dismal December for stocks since 1931, but it’s important to maintain some perspective. The recent correction was preceded by the longest bull market in history, so it could be viewed as an overdue repricing of stocks, as well as a reality check brought on by waning growth expectations.

Here are some of the specific headline risks that have sparked market volatility, along with a review of economic projections for 2019:

Flatter Yield Curve

Treasury yields rose through most of 2018 (causing prices to drop) in response to solid growth and central bank tightening. However, the climb in the 10-year Treasury yield stalled after reaching a seven-year high in early November, when trade tensions…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 20 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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