In 2019, there will be opportunities to earn a living. We asked the analysts what to invest their capital in.
Last year disappointed holders of shares listed on the WSE. In the opinion of the majority of experts, negative factors will continue to prevail in the market and weigh on the domestic indices.
– In our opinion, defensive and non-cyclical companies should be relatively better than the entire market. WIG20 will follow other emerging markets. The funds raised in open pension funds are a big question mark (the PPK has already entered into force and the government may take up the subject of OFE at the end of 2019). We forecast a further decline of WIG20, mWIG40 and sWIG80 in 2019, but we see a chance for a rebound at the end of this year – Union Investment TFI managers are predicting. Therefore, it is worth thinking about portfolio diversification and the inclusion of other equity or asset classes into it.
Western Europe can positively surprise
Geographic diversification will be the key to profits on the stock market. In the opinion of experts in 2019, they can positively surprise the Western European stock markets.
– The business cycle in Western Europe has been slowing down since the beginning of 2018. Long-term tendencies pictured by such leading indicators as PMI in a fairly good way, at least historically, projected the stock market trend in Western Europe, in particular on the German stock exchange. The entire year 2018 was a period of decline in the value of these indicators, which directly translated into the results of the German DAX. The negative information is that these indicators will probably be in a downward trend for several months. The positive factors can be indicated by the fact that a large part of the above-mentioned falls is probably behind us. It may turn out that the second half of 2019 will be a period of reversal of negative tendencies in the European economy, while stock markets will grow on the basis of expectations for an improvement in the economic situation – experts in Vienna Life believe.
In their opinion, in contrast to the US, the valuations of European companies have normalized, which means that the growth space has increased. – Investors present on the US market may in the second half of the year look for other geographical areas for capital investment, in this scenario Western Europe seems an interesting choice – they indicate.
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Despite the weaker prospects, the experts do not completely delete the US stock market. The key to profit will be the selection of sectors and companies. – However, we believe that in the coming year we will see growth on the American indices, although they will cost investors much more nerves than in previous years. Existing growth leaders, namely FAANG companies (Facebook, Amazon, Apple, Netflix and Google), may be replaced by other technology companies. Defensive companies from the so-called old economy should behave much better, as investors will gradually prepare themselves for deteriorating stock market sentiment. That is why proper selection and diversification of the portfolio has never been so important – emphasize Vienna Life experts.
Geographic diversification will be the key to profits on the stock market. In what to invest in 2019. Fotorzepa, Robert Gardziński
In what to invest in 2019: bond time
In connection with the expected slowdown in global economic growth and the end of the cycle of interest rate increases in the US, there is no shortage of supporters of investments in US bonds. – In the case of tax debt, we are positive about the development of events in 2019. The beginning of January brought above average rates of return. Treasury bonds (especially the US and Germany) are considered a safe haven during the cycle change periods and historically around a year before the recession entered into, yields on long-term bonds started to fall sharply, providing investors with above-average profits. It is no different this time – indicate the managers of Quercus TFI.
At the same time, they see the chances of earning money on Polish papers. – 2019 also looks very good. Factors that influenced this market in previous years remain. Over the next quarters, we are positive about the Polish government bond market. It should be favored by limited supply of bonds issued by the Ministry of Finance, very low inflation rate, no interest rate hikes in Poland and an excellent budgetary position. In addition, it is worth mentioning that the approaching end of the cycle of interest rate hikes in the US and the slowdown in the economies of Western Europe make this scenario even more likely – think the managers of Quercus.
Gold will regain its glow
This year, precious metals may return to investors’ favors, which will be supported by growing uncertainty in financial markets. The ending economic cycle may increase interest in gold. Investors will want to protect themselves against rising inflation and the sale of risky assets. According to Vienna Life analysts, such a scenario can be expected this year. – Prices of this metal have been moving in quite a range of USD 1150-1350 per ounce for several years.
The increase in uncertainty in the stock markets, caused by possible further fights for economic supremacy between the United States and China (currently the agreement is in our opinion only a temporary suspension of arms), may support gold quotes. Two factors will be the key to success. The first of these is inflation, which gradually, though consistently, comes to life, supported by policy normalization by major central banks. The second is the fate of the American dollar. If the US Federal Reserve decided to reduce the rate of interest rate increases, it would have a negative impact on the dollar’s exchange rate, which would have a direct impact on the zloty exchange rate. In the opposite scenario, the dollar will maintain its role as a safe haven, although it is hard to expect such a strong growth rate of the American currency as it was in 2018 – analysts explain.
This year, precious metals may return to investors’ favors, which will be supported by growing uncertainty in financial markets. In what to invest in 2019. Fot. shutterstock
Oil with potential
Last year brought a reversal of the upward trend in crude oil. In the perspective of 2019 more arguments support the rebound of raw material prices.
– The WTI crude oil price rose sharply at the beginning of October and exceeded even 76 USD per barrel for a moment. Later, however, there was a dramatic collapse, which in mid-December brought quotations towards USD 45 per barrel. However, we believe that the mining cuts that OPEC and the cooperating cartel have agreed should be enough to balance the market. As a result, we expect a gradual rebound of the oil price to higher ceilings – experts DM TMS Brokers predict.
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During the correction lasting since October, speculative investors have limited their long net position in the oil market by over PLN 570,000. contracts. This proves that the drop in prices was caused primarily by speculation.
– Previous worse sentiment towards oil was observed during the last phase of decline in the raw bear market, i.e. in 2015-2016. This means that the inheritance potential has already been largely exhausted, and the space for potential rebound is really gigantic. Although we expect a clear rise in oil prices, it should be realized that the market environment will be very difficult all the time. The mining in the United States is growing steadily, they note.