December 10


Dave Kennon: Protecting Yourself from the 2019 Stock Market

Dave Kennon, Kennon Financial

Around December each year, many news outlets start publishing stories about stock market predictions for the following year. Normally the articles cite insights from various economists, investment firms, and policymakers.

Let’s take a look at what next year will bring…..

1. From CNBC:  Morgan Stanley strategist who nailed the sell-off sees stocks struggling again next year.

Dave’s Take: Uh oh. That’s sounds ominous.

2. From “Seeking Alpha:” Stock Market Outlook: Why the Economy is Bullish for Stocks Going into 2019

Dave’s Take: Ok. That sounds a little better. Remember: A “bull market” is good and a “bear market” is bad. This article sounds a little more encouraging.

3. From “Business Insider.”  A $736 billion strategist is bracing for a 2019 stock-market meltdown worse than anything we’ve seen this year

Dave’s Take: Well, that doesn’t sound good.

4. From “Bloomberg:” Credit Suisse Backs Stocks in 2019. It starts: “Investors would be smart to remain bullish on equities in 2019.”

Dave’s Take: So this article makes it appear like things are moving in the right direction….

Overall, I can’t help but notice that some super-smart-people believe the markets will go up, and some super-smart-people believe the markets will go down.

So who is to be believed?

To answer this question, let me share with you a great quote:

Market pundits have successfully predicted ten of the last two recessions.

In other words, “experts” have a terrible record of predicting market movements. And, in general, the vast majority of their dire predictions never come to pass.

Don’t worry. I’m not going to get on my soapbox and passionately express how no one has ever been able to consistently predict what the stock market is going to do.

I’m certainly not going up against Wall St. and suggest that, even with their most sophisticated methods, there is zero proof that their predictions are any more reliable than throwing darts at a newspaper filled with stock quotes.

I’m not even going to sound off against the irresponsible “sky-is-falling” financial news reporting that fills the airwaves on a daily basis.

Instead of making arbitrary proclamations about market movements, let’s have a quick history lesson.  Since the Great Depression, the stock market has gone up 66 times and has gone down 19 times. (source)

During that time period, stocks have had an average annual return of +10% per year and bonds +5% per year. (source)

So while I can’t predict the exact direction of the markets over the next year, I do know one thing:

Between now and the end of your life, if a diversified portfolio of stocks and bonds does not return an average of at least 5% per year, it is the first time in modern economic history where it hasn’t.

So over the next month if you hear anyone giving their 2019 stock tips, be sure to remember that the guy has probably predicted ten of the last two recessions too.

Be Blessed,


Dave Kennon, Kennon Financial 


There is no certainty that any investment strategy will be profitable or successful in achieving your investment objectives. An index is a portfolio of specific securities. Indexes are unmanaged and investors cannot invest directly in an index. Index returns are “total returns” with dividends reinvested, which means the return is not only the change in price for securities but any income generated by those securities. The performance of an unmanaged index is not indicative of the performance of any particular investment. Investments offering the potential for a higher rate of return also involve a higher degree of risk. Past performance is no guarantee of future results. Actual results will vary.
Share this Post:

You may also like

Investing in Tulips?
Can It Get Any Worse?