Our partners at LPL Financial have recently published their mid-year economic outlook for 2019. We encourage you to watch their video and read their full report, but I wanted to take just a few minutes to highlight some key insights that might interest you most.
1. Better than expected US economic growth
As of July 1, 2019, we are now in the longest period of economic expansion in US history. Although we typically expect stock market declines after long period of economic growth, most experts believe the economy is still strong and shows very few signs of pulling-back anytime soon. The market will eventually slow or reverse its growth, sometimes called a ‘market correction’, but LPL sees no signs of a correction happening soon. As long as you are investing for the long-term, don’t focus on short-term reversals in the market. And if you are investing with a short-term goal in mind, talk to your advisor about the most suitable way to manage your assets for potential success.
2. Emerging Markets outperform Developed Markets in economic growth
Diversity can be important for long term investing. Depending on your goals, the time may be right to invest a portion of your assets in emerging markets. Emerging markets are typically in underdeveloped countries and almost always have more risk than well-developed markets. However, the opportunities are sometimes greater in these markets. Several funds are available to take advantage of these opportunities, while spreading the risks over a broad global area and different industry types. Again, talk to your advisor to see if this asset type fits into your financial plan.
3. Corporate profits are likely to exceed expectations
If you rely on income from your stock dividends, this could be continued good news for you. Many clients choose to invest in stocks that pay a portion of their profits to investors. These pay-outs are called dividends, and 2019 is already a record year for corporate dividend payouts. Many clients augment their income with dividend payments, and some choose to use dividends to reinvest in the company stock. Either way 2019 is shaping-up to continue the record-setting pace.
Everyone has different needs and goals, so talk to your Advisor about how you are progressing according to your own Financial Plan.
Please see the full Midyear Outlook 2019 publication for additional description and disclosure. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in this material may not develop as predicted.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. All indexes are unmanaged and cannot be invested into directly.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
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