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March 25, 2019
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Every year we see a few categories of investment that take us by surprise. It might be that runaway stock you invested in a formerly slow industry, such as when was slow for a few years and then climbed recently. But on the whole, most years have been slow but steady progress away from the crash of 2008 in the last decade. As we move away from that horrible reminder of a market gone crazy, there are a few areas from this years returns you may want to keep an eye on for the future.

U.S. Bonds

There was a time when putting some of your cash into bonds, especially into American Bonds, was a good way to add some solid safe aspects to your investment strategy. But that can backfire on you when you have a year like the one we had last year. The year started with some strong performances from this sector.

But once the Federal Reserve was seen as a possible problem because of anticipated rate increases, that all changed. It didn’t happen in quite the way the market feared but the damage was done in any event. So now the bonds you hold have held steady but not increased in value, and might have even actually lost you a bit of money. It may offset the gains in the stock market, but that is little consolation right now.

International Markets Let Us Down

If you have been watching the stock index for the emerging nations international markets, you may have noticed something changed in the last year. In a market that has been staying well ahead of the curve, this year they began to show signs of wear and exhaustion.

A market that could be counted on for 2-300% returns were lucky if they posted an even return by the end of the year. This may shift again this year, but keep an eye on any new movement in this area. Political changes are causing upheaval across the board.

Are Small Caps on the Mend?

If you are an investor who has learned their lesson and you diversify, then you may have noticed that whatever losses you had from your bonds last year were more than made up for by your small cap investments. This is an area that has not been performing well in the last few years and we were surprised to see a big leap this past year for this group.

Even if you take into account the surprise bounce after the election when many businesses were counting on legislative changes to favor business growth, the jump from small caps was a big surprise to us all.

Lessons to be Learned

All in all, it looks like once again the only thing you can predict well for the market as a whole was that the general direction continues the trend towards growth. But if you were trying to play the game and move your stocks into areas of growth, you may have found last year’s market a bit of a challenge.

Once again that old adage, to spread the wealth around, is true. We hope that all your investments are investments in growth, in prosperity and most of all in your own health and well-being in the end.

Waverly Wren

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