At the end of every year, there are projections for the next year and with every projection 50% are going to be correct and 50% are going to be wrong. In an article by Caroline Valetkevitich and April Joyner of Reuters, the company they work for, Reuters, looked at 14 major financial institutions and found that 10 have overweight ratings on industrials or financial sectors. Another cyclical sector, consumer discretionary was the next most recommended sector followed by information technology.
Last year at this time, the same analysts were recommending defensive-leaning health care followed by technology. Then the recommendations went to utilities and consumer staples.
It was not a bad decision because the defensive portfolio outperformed the market for 9 months and were up 28%.
If you were bought the S&P Technology Index it was up 45% in 2019, communication was up 32% and financials were up 29%
If you consider the year, it was one of low interest rates, it took a long time to do the Phase I of the China trade policy. the economy is doing well which is good for the consumer continuing to buy goods.
Linking to dividend paying stocks, we do not know how well the stock market will perform over the course of the year, however we do know if you buy profitable stocks that pay dividends you should be well protected and you can go in confidence your money is well protected.
There are more questions than answers, till the next time – to raising questions.