Many of the risks that were a major concern at the end of 2018, such as trade tensions between the U.S. and China, uncertainty about Brexit, fear of central banks increasing interest rates, and the fear of an imminent recession, diminished throughout 2019. As a result, markets for most classes of investments had a better than average year, even as economic growth slowed.
Looking ahead to 2020, the global economic picture appears to be a continuation of 2019. For most developed countries, growth should continue to be slow, but positive; unemployment should remain low and interest rates and fiscal policy should continue to be accommodative. The next recession still appears to be off in the distance. All of this leads us to expect another year of positive (albeit more modest) returns for stocks and bonds, though there could be considerable volatility along the way, as the current expansion – which is the longest in modern history – continues to chug along.
We will continue to watch the markets and the economic and political landscapes very closely, in order to shift portfolios to a more defensive position when warranted. For now, opportunities for growth are persisting, so we remain cautiously optimistic.
From all of us at RBC Wealth Management, we wish you and your family a very festive and joyful Holiday Season. Here’s to a happy, healthy and abundant 2020! May we continue to find meaningful ways to enjoy and contribute to our community. Please reach out to our team if we can be of any help to you, your family or friends.