While I would not do any business with Wall Street giant Goldman Sachs, I do have great respect for their research and just read their 2019 outlook. In a word, they are quite bullish on December of this year but not very bullish on 2019, predicting a 5% rise in the S&P, mostly in the first half of the year, before economic growth slows to a crawl in the second half.
“If the full 25% tariffs are levied on all imports from China, the earnings impact could be significant, potentially eliminating any profit growth next year.” As some earnings growth is already “baked into” the present S&P level, removing that growth makes the S&P somewhat over-valued, possibly with the S&P ending 2019 at just 2,500. They place a 30% probability on this.
They recommend portfolios that lien more toward utility and telecom stocks, along with consumer staples.
Lastly, I was glad to read “cash will represent a competitive asset class to stocks for the first time in many years.” Amen! Some investors don’t appreciate the fact that holding cash can be a smart strategic decision.