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What's going on?

2020 is fast approaching, and analysts are expecting things to be slow and steady following this years boom. Here’s hoping there are no party-crashers to worry about

What does this mean?

The ongoing expansion of the US economy is the longest in its history, but its finally starting to slow down. And thats true of the global economy as a whole: while economists are forecasting growth in the year to come, theyre expecting it to lag behind that of 2018.

That slowdown in growth could hit company earnings and, in turn, the stock market. Analysts polled by Bloomberg think US stocks will go up by an average of 4% in 2020, compared to 2019s more-than 25% gains (tweet this). And with the increasing danger of bankruptcies as higher wages put profits under pressure, many analysts are recommending a Goldilocks approach: taking on investments with just the right returns for just the right amount of risk.

Why should I care?

For markets: Look for quality.
Some investors are leaning toward quality investments: companies with stable earnings, high margins, and healthy ratios of assets to debt. Thats in contrast to the growth stocks (e.g. tech companies) thatve been popular in recent years. Others are recommending dividend-paying stocks, which promise a regular cash return on top of future price increases. So-called defensive stocks like utilities and consumer staples could also come into vogue if the economy continues to slow: they offer the kind of products consumers need no matter the economic climate.

The bigger picture: Nothings certain.
2020 is set to be marked by yet more uncertainty: the US-China trade war isnt going anywhere despite a phase one deal, the US presidential election could turn the countrys healthcare and tech industries upside down, and the UK is all set to leave the European Union (for real this time). Its not easy to predict where these will lead, which is why some analysts suggest diversifying your investments across regions and industries, so youre not too exposed to any one risk.

Originally posted as part of the Finimize daily email.

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