The past year was an eventful one, particularly in terms of the political risks. Still, the economy and financial markets continued to grow, as the underlying fundamentals remained sound. Yes, the fundamentals are weakening. But the most likely outcome is continued slow growth. Even if growth becomes muted (both here and abroad) or any other issues (known or unknown) emerge, the underlying strength of consumer spending should limit any damage. And even if we do get a recession? The impact is likely to be much milder than many of us fear.
Overall, 2020 looks likely to begin with more of what we’ve seen so far in this expansion—just slower. Slower economic growth and slower market appreciation. Despite the rising risks, which have the power to change things quickly, we’re not in a bad place.
Brad McMillan is the chief investment officer at Commonwealth Financial Network.