An end of year rally following the Christmas break was not enough to offset the losses made in the stock market trend this year. All major indexes ended the year down, and overall performance hasn’t looked this bad in a decade.
However, a bad year doesn’t dictate anything in the future of the stock market trend, and there were as many high points during 2018 as there were low ones. Poor performance can be easily explained, and many of the triggers likely won’t have the same impact in 2019.
All major indexes ended up in negative territory at the end of 2018.
- The Dow Jones Industrial Average ended 2018 down -5.6%. The final quarter was particularly brutal with high volatility and record slides.
- The S&P 500 index fared slightly worse, ending the year at -6.2%
- The NASDAQ didn’t suffer as much as other main indexes, but still ended the year down -3.9%
While indexes lost overall, there were still winning stocks during the year. Well diversified portfolios were better able to weather the downtrend.
Stocks That Shook the Market Trend
The importance of diversification can be seen in the stocks that still grew despite downwards trajectory in the market.
- Microsoft (NASDAQ: MSFT) was largely unaffected by the tech sector slowdown. It’s now the most valuable stock in the world and grew 18.7% in 2018.
- Pfizer Inc. (NYSE: PFE) was another strong performer. The pharmaceutical giant grew 20.5%.
- Nike (NYSE: NKE) shares also performed well. Price increased 18.5%.
- Boeing Co. (NYSE: BA) experienced some volatility during the year, but still increased 9.4%.
- Visa (NYSE: V) shares performed well. The company was able to benefit from high consumer confidence and spending. Stock price increased 15.7% during 2018.
- Verizon Communications (NYSE: VZ) was the best performer in the Telecommunications Services industry. Stock price increased 6.2% during the last year.
Trade and Rate Hike Volatility May be Limited in 2018
Volatility caused by trade concerns and rate hikes should be mitigated in the coming year. President Trump has indicated that there is excellent progress being made in negotiations with China. The Fed has also indicated that it will have fewer rate hikes in 2019. These two factors could allow for a more positive stock market.
While indexes trended down in 2018, there was plenty of life in the market trend and still winning stocks to be found. Price declines also mean that there are now strong buying opportunities with undervalued stocks. Post-Christmas confidence could carry over into this year.
Markets reopen on January 2 for the first day of 2019 trading
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