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Global equities capped the strongest year since 2009 with Q4’s 9% gain, lifting full-year returns to 26.6%. We expect the bull market to continue in 2020, although returns are unlikely to match 2019’s magnitude.
We expect 2020 will be a moderately positive year for equities. Sentiment is still not euphoric, yet continues to improve as 2019’s big fears did not materialize.
After rising 16.2% in 2019’s torrid first half, global equities took a breather in Q3—finishing flat for the quarter. As we anticipated, equities had more short-term volatility than earlier in the year, which slowed gains.
Long, flat periods followed by gains have been a hallmark of this bull, which should continue with volatility into 2020.
Global equities added another 3.6% in Q2, capping the strongest first-half since the late 1980s. As we anticipated, Q2 brought more volatility than Q1, but robust returns in June carried equities to all-time highs, with the MSCI All Country World Index returning 16.2% year to date.
We expect the market to continue accelerating in this bull’s final third – albeit at a slower pace in the second half of the year – on the back of post-correction highs.
Through March 31, global equities were up 16.9% since December 25’s low and 12.2% in Q1. The MSCI All Country World Index has enjoyed the V-shaped recovery we expected following the sharp sell-off in December. Overall, this should be only the beginning of a great year for global markets.
Equities have rebounded strongly from 2018’s lows, demonstrating a V-shaped recovery associated with prior corrections. We expect equities to accelerate through the bull market’s final third.
2018 was a difficult year—downside volatility returned and the year concluded with the second worst December on record. Global equities declined -9.4% last year and returns didn’t meet our optimistic expectations. Yet, looking forward (as markets do), evidence we will detail overwhelmingly argues against being bearish now.
2018’s market decline was driven more by fear than fundamentals, a classic characteristic of corrections which typically feature strong V-shaped recoveries.
Founded in 1979, Fisher Investments is an independent, fee-only investment adviser with $197 billion under management.* Fisher Investments maintains four principal business units, Fisher Investments Institutional Group, Fisher Investments Private Client Group, Fisher Investments 401(k) Solutions Group and Fisher Investments Private Client Group International, which serve a global client base of diverse investors. The clients of Fisher Investments and its affiliates include over 100,000 clients. Founder and Executive Chairman Ken Fisher’s “Portfolio Strategy” column for Forbes ran from 1984 through 2016, making him the longest continually running columnist in the magazine’s 90+ year history. He has also authored several New York Times bestsellers on finance and investing. (*As of 3/31/2022)
