Outlook 2019: FUNDAMENTAL - How to Focus on What Really Matters in the Markets

Outlook 2019: FUNDAMENTAL - How to Focus on What Really Matters in the Markets

December 27, 2018

After a mixed first half of the year and a solid third quarter, stock markets weakened considerably in the closing weeks of 2018. Turmoil in the financial markets is never a pleasant experience for investors, and that’s why we rely on helpful guidance, context, and insight to help us weather these times and prepare for what may lie ahead. Indeed, LPL Research’s recently released Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets provides investors with a guidebook for navigating a maturing economic and market cycle.

LPL Research believes the following three themes will be key to the markets: 

  • Sustaining growth via fiscal policy. We expect the ongoing impact of fiscal stimulus will be readily apparent in 2019 and that policy will continue to play an important role for the economy and financial markets—potentially extending the duration of the current business cycle. 
  • Creating opportunity amid rising volatility. We believe any bouts of market volatility should be embraced—not feared—by suitable investors as an opportunity to rebalance portfolios toward targeted allocations.
  • Fundamentals in focus. This economic and market cycle may have more room to run, driven by the fundamentals supporting economic growth and strong corporate profits. Depending on the measures, we believe this cycle may prove to be the longest in history. Risks such as trade uncertainty, slowing global growth, and geopolitics do require careful monitoring, however, for their potential impact on the markets and economy.

“We do not anticipate a recession in 2019, thanks to the fundamentally driven economic momentum, combined with fiscal incentives and government spending programs on tap for the coming year,” said Executive Vice President and Chief Investment Strategist John Lynch. “We encourage investors, where appropriate, to base any investment decisions on the fundamentals rather than acting on speculative headlines, especially as the cycle matures and the 2020 presidential election now comes into increased focus.”

Armed with the investment insights of LPL Research’s Outlook 2019, and supported by the guidance of a trusted financial advisor, we expect investors can remain prepared for investment opportunities ahead. Read more about LPL forecasts and key themes in the full Publication.

And as always, do not hesitate to reach out with any questions or concerns.



The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. The economic forecasts set forth in the presentation may not develop as predicted. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

This research material has been prepared by LPL Financial LLC.

Tracking #1-803550 (Exp. 12/20)

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