And so another year draws to a close. And not such a bad year for investors either. Global markets have moved onwards and upwards even in spite of the many issues visited on us poor investors by various Governments around the place!
Thankfully the semblance of a trade deal has been finalised between the US and China. Amazingly, for a man who reputedly wrote a book on deal-making, Trump has kept the world waiting nearly two years before he could manage at least some agreement on terms. Remind me not to reference his book!
Boris Johnson has been re-elected in a landslide so expect Brexit to finally come to fruition very shortly. And no doubt there will be some major issues suddenly becoming apparent to send ‘shivers’ through the world’s investment markets. So prepare for some market turbulence courtesy of Britain/Europe over the next 12 months. Nothing like this has ever occurred before so there’s plenty of scope for things to be stuffed up. I would certainly be surprised if we didn’t get some surprises from Brexit!
And over in my part of the world, Australia is still being economically challenged with more interest rate cuts to come next year it would seem. Although not a positive message for the economy, it will continue to herd more investors into markets looking for decent yields. And the recent property boom has provided us with a salient reminder of the risks when creating single asset investment portfolios. So take note.
Hong Kong is still in major turmoil and things are not looking good for them. It appears they have moved into a recession as a result, and tourism must be just about nonexistent at the moment. A huge Asian economy grinding to a halt can only be bad for the region. Hopefully, the Chinese Government sees its way of solving the issues in a non-violent and conciliatory fashion very soon.
So, far from being a benign, investment environment, it looks like there are many and varied challenges in the year ahead. And that’s not to mention the occurrence of the fabled ‘black swan’ event. There’s always the chance of something out of the norm, thrusting itself onto the world stage at a moment’s notice.
Which all in all makes for just another standard operating condition for us investors? It is really only in the last phase of boom markets that euphoric conditions permeate investment markets and optimism is the norm. And we are certainly not at that stage currently.
So we investors will have to face the trials and tribulations of market volatility for another year. But as long as economic growth moves upward across the globe we should all be tabulating our portfolio returns in the high single digits this time next year.
And remember, the end of the year is a great time to review your portfolio, fine-tune it and make changes where required. Rebalancing back to your preferred asset allocations is essential and this is as good a time as any to do it.
So to you all, thanks for your support throughout 2019 and I extend to you a very Merry Christmas and a safe, happy and prosperous New Year for 2020.