Mon. Feb 17th, 2020

What to Invest in 2019

A few days after entering 2019, the year that ends will undoubtedly be one of the worst years for the markets of the last decade. There have been virtually no assets or shelter markets. The leading stock exchanges in the world will end up negative.

And therefore, it is natural that this year, you have ended up with losses on your investments. Unless you have made some specific additions throughout the year, it is normal that it was a pretty lousy year. With this scenario so little encouraging, fear smells, and we all wonder at this moment. Where to invest in 2019? These are my proposals.

What to invest in 2019 if your goal is to protect and maintain your savings

By now, you should no longer have fixed income funds. They are a drag. With a change of pace in monetary policy, the world’s leading central banks are already developing restrictive policies. That is, interest rates will rise in all markets. And that is bad for fixed income. If invested, it should be short. And it does not make much sense because the commissions take the poor returns.

Being in liquidity is, therefore, your best alternative at the moment. But that does not necessarily mean having the money in sight at 0%. You can use some of the best-paid accounts and deposits that are still in the market. They will not serve to protect your savings against inflation, but at least you will mitigate it in part — the returns you can expect a range from 0.30% -1.25% APR.

But make no mistake, that the forecasts of interest rates in 2019 say that they will rise, does not mean that you will return to see attractive offers of deposits for your savings. There is still much for that.

What to invest in 2019 if you want to grow your assets

Rule number one should serve as a guide to decide what to invest in 2019. Never sell after a year in which the indices have fallen between 10-20% and good companies even more. It’s stupid. The uncertainties generated by politicians, the return to restrictive monetary policies, the tariff war, etc. They bring and will bring volatility to the market. But that is only synonymous with one thing. Opportunity.

Each in proportion, but if you want to see your capital grow, wealth management necessarily has to incorporate equity. Specifically, you have to invest in 2019 in the European stock market. Many relevant companies have fallen between 30-50%. However, business results have grown.

Although it is true that in the coming years, we will experience a slowdown in developed economies and the world, there is a positive divergence between valuation and price of many listed companies, which must be adjusted. And that generates a critical investment opportunity in a large number of companies and markets, as we had not had for a long time.

The healthy corrections of technological values in the United States already anticipate that we are near the end of a growth cycle, which has also been one of the longest in history.

Everyone expects the American stock market to fall sharply. But it does not have to be like that. We can have a slow and sustained fall in the US, while in Europe, we close the recovery gap that we need, without there being a contagion effect, possibly when the Fed makes a mistake. A rise in interest rates may be. Who knows what the trigger will be.

The fact is that if you wonder what to invest in 2019, you can, for example, invest in car manufacturers with a lot of conviction. The valuations are on the floor right now. Porsche, BMW, Daimler, Renault, Volkswagen, are any, excellent choices.

The German and French markets, right now, have indexes full of possibilities. Companies such as Siemens, Saint Gobain, E.ON, BNP Paribas, AXA, are in really attractive valuations and pay a good dividend if what you want is to collect the income.

But come on, that all of Europe has cheap companies to invest in with complete peace of mind. I can’t tell you when they will come up. But they have a significant safety margin, that is a fact. Even if it is only a matter of probability, the conditions that exist now are much better than what was in the market one or two years ago.

This opinion, ex extrapolate to the Iberian market. In Spain and Portugal, there are enough opportunities to build a portfolio of shares to invest in 2019, attractive enough.

Domestic banking is very cheap. It is a matter of time, once the interest rates are normalized after all the regulatory adjustments are discounted. After the moment in which the banks have the worst image, they are correctly valued.

2019 will be a year where there will be a slowdown but no recession. At least yet. It will be a year in which the downward investment against the Nasdaq 100 can be more than impressive, but at the same time, even more so in Europe with a view to one or two years. If you are not sure where to invest in 2019, you can always choose to do it through independent investment funds that do the work of asset selection for you. Or when in doubt, indexed funds with low commissions. You choose how, but you know where.