Whatever perspective we look at the performance of financial markets this year, it would always come to the word of ‘astonishment’ (not to say much). Not only because 2019 was the year of countless uncertainties, which have not even been unravelled. For example, in the matter of Brexit, we already know that everything points to a real departure of the UK from the European Union. However, what important was never that fact, but the form and its consequences, and at that point we continue as we have been for twelve months. Another example, the trade war between US and China, the situation worsens during the year, and although the sign of a first agreement is expected, which should reduce the conflict slightly, but the fact is that once again problems have not been resolved. All these will extend the theme until at least the 2020 US elections, which I had already referred to as Trump’s primary strategy.
Photo by Paul Fiedler.
But notwithstanding all the unknowns present or the mere fact that companies are not increasing their profits in rational proportion to the rise in their securities. The question remains the same for most analysts, there are no investment alternatives. Which reminds me of what was said pre real estate crisis in 2007 or dot.com pre crisis in 1999, when you made money almost with your eyes closed, as long as you invested in the rise. The difference, perhaps huge, is that the current bubble has been built and is being maintained by central banks, a market force that is supposedly the strongest of all, simply because today they are not tied to the conceptions of yesterday, today. They have free hands to inject whatever capital they want into the system, without major restrictions, but we will see how long this invincibility will be maintained, especially at a time when assets are in a clear upward stretch, one of the primary signs before a bubble bursts.
