Three key market trends every investor should know about in 2020, from Mike Larson.
During this time of year, there just doesn’t seem to be enough — well — time. Organizing holiday meals and gatherings, finalizing travel arrangements, getting all the shopping done etc.
It involves days and days of planning, running around and overcoming logistical hurdles. But in the end, it’s all worth it when you see smiles on the kids’ faces. But it can be easy to neglect your investment portfolio, and now is not the time to be complacent.
This particular December, things are a bit more hectic as I will be joining some of you on board the 2019 Money, Metals, & Mining Cruise that sets sail Friday (see below).
In case you can’t make it, here are three of the big-picture market trends I’ll be focusing on that should give you a better idea of where markets stand heading into 2020 – and beyond.
Corporate debt markets are my single-most important area of concern. What has been going on there the last few years is every bit as dangerous, speculative and reckless as what we saw in the home mortgage market in the early 2000s.
Too much money has been borrowed by too many companies with too many risks. As a result, lenders and investors who have foolishly extended credit to them at ridiculously low rates are going to get hammered.
Risk spreads are going to blow out. Delinquencies and defaults will spike. Bankruptcies will jump. And losses will soar, particularly if I’m correct about the high risk of a 2020 recession.
To protect yourself, I recommend getting out of or dramatically reducing your exposure to high-yield junk bonds and exchange trade funds (ETFs) and mutual funds that own them. Also reduce your exposure to investment grade corporate debt. And with the money raised by exiting those positions, buy Treasury-focused funds. An example would be the iShares 7-10 Year Treasury Bond ETF (IEF).
Second: Do not let yourself get shaken out of gold, silver and precious metals miners on pullbacks or corrections. That includes the one that began in early September. All my research suggests this is a new, powerful bull market for metals — one that’s still in the early innings.
You can profit from simple, easy-to-own investments such as precious metals or mining ETFs like the VanEck Vectors Gold Miners ETF (GDX). Or you can sign up for my Safe Money Report, where I drill down and get more specific with individual miners.
My third point is that I strongly believe we’re in a late-cycle/end-cycle environment. This means you do not want to load up on the same kinds of stocks now that you might have wanted to pile into a few years ago.
Focus on safer, yield-oriented, lower-volatility stocks. They’re a much better play here compared to a lot of the higher-risk stuff I see some on Wall Street peddling.
With that, it’s time to get back to my year-end prep work — because there sure is a lot to do!
I’m putting the finishing touches on my cruise presentations. Can’t make it? Not to worry. You can still join me and dozens of other analysts, money managers and market experts at the Orlando MoneyShow from Feb. 6-8. I have several presentations and a luncheon scheduled and would love to meet and talk markets with you.
You can check the grades on YOUR stocks at the Weiss Ratings website: www.weissratings.com or get specific names, and actionable “buy” and “sell” signals by subscribing here: Subscribe to Safe Money Report here…
