SFG Top 10 Surprises for 2020
By Brad Rathe
Chief Investment Officer
January 23, 2020
1. Gold continues to shine in 2020. Dollar weakness in 2020 contributes to gold and commodity gains.
2. US Big Tech underperforms on more concerns on privacy and monopolistic tendencies.
3. Japan equities surge with optimism surrounding the upcoming Summer Olympics.
4. German 10 Year interest rates go positive during 2020. Germany initiates some fiscal stimulus and the European economy responds positively.
5. US Gaming Stocks outperform US Streaming Stocks. Streaming services are becoming very crowded, including NFLX, DIS, ROKU, AAPL, NBC, HBO and Hulu. At the end of the year, we will have new gaming consoles from Sony and MSFT, which, historically, have been a growth catalyst for gaming companies like EA, TTWO and ATVI.
6. Emerging Market Equities outperform US Equities. Normally, this occurs in times of a weakening dollar and rallying commodities.
7. US Inflation ends year about 2%. Classic inflation pressures could emerge, including: tight labor market with rising wages and geopolitical pressures forcing commodities higher.
8. UK leaves the European Union and the UK Stock Market and the Pound Sterling move higher.
9. Corporate Buybacks fall from prior levels, causing concern for equity valuation levels that will keep gains muted in 2020. The corporate tax rate decrease caused many companies to buy back more shares, however, this is waning.
10. Low volatility ends up being not low volatility in 2020. Factor investing has become very popular the past few years. In 2019, low volatility funds were the most popular factor and outperformed the broader market.
*We were 9 for 10 last year, the dollar rallied in 2019.
SFG Top 10 Surprises for 2019
1. The US Stock Market will return more than 10%
2. The Dollar will be weaker
3. The Federal Reserve will not raise interest rates
4. Active Management beats Passive Management
5. Emerging Market Debt will be top Fixed Income idea
6. Crude Oil will be higher
7. Inflation will end year below 2%
8. Gold will have a positive return
9. China / US Trade dispute will get a minor positive resolution
10. Growth will be value again in 2019
**Byron Wein has done a Top 10 Surprises for 34 years. Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.
Bradley J. Rathe, CIO of SFG wrote these you on January 4th 2019.
Unless otherwise expressly indicated, the opinions or views expressed in this article are the author's own and do not reflect, and may differ from, the opinions or views of StrategIQ Financial Group, LLC or others within StrategIQ Financial Group, LLC, including its officers, managers, owners, employees or other service providers.