A “rollercoaster” is perhaps the best way to describe 2018. It was a year full of market volatility, global economic uncertainty, political turbulence, climate disaster and (personal) data dystopia – and that’s to name just a few. However, the vast majority of the world’s biggest businesses have managed to overcome these hardships to find themselves back on track in 2019.
So, where should you invest in 2019?
Global economic environment in 2019
During the past year, financial markets experienced bouts of heightened volatility, as investor sentiment was affected by an increase in trade tensions, developments in the oil market and shifting expectations over monetary policy in the US.
Until today, the global economy is facing a confluence of risks, which could heavily degrade economic activity and inflict substantial damage on longer-term development prospects. These risks include an abrupt tightening of global financial conditions, an escalation of trade disputes, as well as intensifying climate risks. The overall possibility of financial stress and volatility leads to a global market slowdown.
Amidst current uncertainty, any unexpected developments or a sudden shift in sentiment could trigger sharp market corrections and an erratic reallocation of capital.
However, the United Nations WESP report predicts steady global economic growth of at least 3% in 2019 and 2020. As the impulse from fiscal stimulus decreases, growth momentum in the US is projected to fall from 2.8% in 2018 to 2.5% in 2019, and then 2% in 2020. While the EU is predicted to experience steady growth of 2%, the risks are tilted to the downside, including the potential aftermath of Brexit.
In China, another market-leading giant, growth is expected to slow to 6.3% in 2019, compared to 6.6% in the previous year, with policy support trying to offset the negative impact of trade tensions with the US. A few large commodity-exporting nations, including Russia, Brazil and Nigeria, are expected to show better performance this year.
Economists and financiers are afraid that further escalation by President Trump, such as levies on foreign autos or tariffs on more Chinese goods, could dramatically slow global growth. Weakness in China, partially driven by the fallout from the trade war, has already negatively affected Germany, Australia and other countries – slowing exports, raising supply chain costs and concerning political and economic leaders.
The ongoing US-China trade war has a large impact on the investment environment, chilling trade flows across the world. However, if you are wondering where to invest in 2019, there are still a number of good choices you can make. Let’s dive in and find out what investment ideas for 2019 the stock market can offer you.
Where to invest in 2019: 13 best-performing stocks of the year
It’s been a volatile time for the stock market. Nonetheless, some stocks have posted solid growth despite that rockiness. Below is a list of best-performing stocks, measured by year-to-date performance. Which ones will you choose as your investments for 2019?
Ticker symbol: SYF
Current market capitalisation: $23.68 billion
Year-to-date return: +46.40%
Description: A consumer financial services company, offering products such as promotional financing and loyalty programs, FDIC-insured consumer savings products, credit products and instalment lending.
Ticker symbol: TSN
Current market capitalisation: $23.42 billion
Year-to-date return: +48.80%
Description: An American multinational corporation, operating in the food industry. World's second-largest processor and marketer of beef, chicken and pork.
Ticker symbol: FLT
Current market capitalisation: $24.14 billion
Year-to-date return: +50.82%
Description: A provider of fuel cards and workforce payment products and services to its customers around the globe.
Ticker symbol: HES
Current market capitalisation: $18.67 billion
Year-to-date return: +51.98%
Description: An American global independent energy company engaged in the exploration and production of natural gas and crude oil.
Ticker symbol: CELG
Current market capitalisation: $69.24 billion
Year-to-date return: +53.11%
Description: An American biotechnology company, discovering, developing and commercialising medicines for cancer and inflammatory disorders.
Ticker symbol: XRAY
Current market capitalisation: $13.49 billion
Year-to-date return: +54.62%
Description: An American dental equipment maker and dental consumables producer, marketing its products in more than 120 countries.
Ticker symbol: GPN
Current market capitalisation: $25.31 billion
Year-to-date return: +56.18%
Description: An American company providing financial payments technology services globally.
Ticker symbol: AMD
Current market capitalisation: $31.75 billion
Year-to-date return: +59.05%
Description: An American multinational semiconductor company, developing computer processors and related technologies for consumer and business markets.
Ticker symbol: APC
Current market capitalisation: $35.44 billion
Year-to-date return: +60.99%
Description: A company involved in hydrocarbon exploration and production; additionally engaged in petroleum and natural gas gathering, processing, treating and transportation.
Ticker symbol: CDNS
Current market capitalisation: $20.03 billion
Year-to-date return: +63.91%
Description: An American multinational company, providing electronic design automation software and engineering services.
Ticker symbol: CMG
Current market capitalisation: $20.18 billion
Year-to-date return: +68.66%
Description: An American chain of fast-casual tacos and burritos restaurants in the US, Canada, UK, France and Germany.
Ticker symbol: XRX
Current market capitalisation: $7.96 billion
Year-to-date return: +79.30%
Description: An American global corporation, offering workplace solutions, document management and digital printing technologies in over 160 countries.
Ticker symbol: COTY
Current market capitalisation: $10.05 billion
Year-to-date return: +103.89%
Description: An American multinational beauty company engaged in developing manufacturing, marketing and distributing cosmetics, fragrances, as well as skin, nail and hair care products.
Are these stocks the best investments for 2019? Not necessarily. As it is known, it is extremely hard, if not impossible, to predict the future of the stock market. However, with the year-to-date returns the stocks above have recently shown, you may choose to add some of them to your portfolio.
Don't forget about indices
However, the easiest way to gain exposure to the broader market is to choose a market index. It is an exceptional way to gain access to the stock market without the need to analyse the performance of individual companies.
There are a large number of indices compiled around the globe, from China to Russia to the US. Each of them has distinct features, offering different investment benefits and opportunities. It benefits investors and traders as it provides them with generally tight spreads, long trading hours and a high degree of liquidity.
If you are still doubting where to invest in 2019, you may consider one of these world-renowned indices, including the NASDAQ-100 Index (NDX), the Dow Jones (US30), the Nikkei 225 (J225), the FTSE 100 (UK100), the Swiss Market Index (SMI), the S&P 500 (US500) and the DAX 30 (DE30).
Any other options?
When deciding where to invest your money, you’ve got plenty of other options to choose from. These could be:
Each of these asset classes comes with its own advantages as well as pitfalls. For example, bonds are typically considered to be less risky than stocks, however, their potential for returns is also much lower. If you are interested in mutual funds, you should bear in mind that fund managers charge a percentage-based fee when you invest in their assets, and most of the time, this fee makes it difficult for investors to beat the market. If you decide to invest in physical commodities, they will serve you as a safeguard against hard economic times, meanwhile lacking liquidity.
Another way of investing in 2019 can be a contract for difference, or CFDs. With CFDs, you don’t actually buy the underlying asset itself, but instead, simply speculate on its price direction. It allows you to go long or short on the asset, providing greater liquidity and easier execution. However, since CFDs are a leveraged derivative, both winnings and losses are magnified.
No investments can give you a guarantee of financial success. That is why, before making any investment decision, we recommend arming yourself with as much knowledge as possible. To better navigate global markets, you can check out free online courses, guides and glossary provided by Capital.com.