Outlook for 2019

Happy New Year! 2018 is in the books and the recent turn in markets made it a year to forget for most investors. Q4 saw the much-expected & needed correction in US equities. While the investors seem to be breathing a sigh of relief and jumping back into the market, I am not convinced that this is the end of the correction and expect the downtrend to continue.

Here are the reasons why I continue to be bearish:

The US economy just went through 9 consecutive quarters of growth and the rate of growth is now tapering off. More importantly, most companies had record operating margins when they were hitting their respective all-time high stock prices. So, when you simply look at a short-hand financial number like P/E ratio, keep in mind that the margins are baked into the numbers — which is why you cannot base your full investment decision simply based on one number. Add to that revenue growth has plateaued for companies in this cycle and wage growth has consistently increasing month after month. Even though the Fed doesn’t see a recession coming (they never do), that recipe smells like a upcoming recession to anyone looking at the data objectively.

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Top Investment Picks for 2019

As the new year rolls out, its time to share the annual investment pick contest that I run. This is the 4th year in the running. This is merely meant to be a fun experiment to run and collect top investment picks for 2019 from a community of investors I regularly interact with. There are still some great picks from the 2016, 2017 & 2018 top picks, and I invite you to check them for ideas. Remember that investing is a long game — so, focusing on short intervals like a year is not prudent — even though this contest focuses on one year return. Plenty of older picks may present long term value.

The rules were simple: Pick one investment (stock, bond, fund, currency, commodity, cryptoasset or any other form of investment security), and present a short & quick investment reason behind the pick. I will track this progress over the year and provide quarterly updates on this blog.

Top Investment Picks for 2019

Before I present the picks, I would like to remind the readers that these are simply picks based on current outlook and each investor should not take this as investment advice. If you decide to pursue these investments, please do your due diligence before investing in any of the securities mentioned.

Without further ado, here are the top picks from the investing community for 2019.

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Results: 2018 Top Investment Picks

As we welcome the new year, its time to look back and evaluate some of our investment picks/decisions. At the end of 2017, I reached out to the investing community and asked them to pick one investment security as their top pick for the year 2018. Plenty of folks responded and I was happy to compile the list and track them over the year.  The original post can be found here. Picks from previous years are indexed on this page. It is always interesting to see what everyone was thinking a year ago and how the picks played out over the year.

Again, I would like to remind readers that this was meant to simply be a fun exercise and should not be considered investment advise. Please do your own research before investing in any securities.

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Books I read in 2H 2018

2018 turned out to be a great year for knowledge compounding by reading a wide variety of books. I took a conscientious decision in 2017 to quit some social media platforms such as Facebook and Instagram and whittling away my overusage of Twitter. I still see a lot of value in Twitter, so I find it hard to quit completely — especially since I get to connect with some brilliant people and have/follow interesting ideas and conversations in an easily digestable format.

In addition to quitting social media, I made a decision to reduce my consumption of news. Most of today’s news – be it financial media, political media etc is nothing but drivel that generates excessive noise, and I wanted to get rid of that from my life.  These little changes opened up so much time; allowing me to do more of what I wanted to do for the past few years: read more books.

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Personal Challenges & Habit Formation 3

This blog has always been finance and investment related, and I never shared much on the personal front. However, I figured I will share some of my personal goals that I have struggled with & achieved so far in 2018 — just because its something that I have been reading & thinking a lot about recently and find it interesting. My major personal goal for 2018 was related to habits (and habit formation). Over the years, I had fallen into some bad habits while letting go of the good ones; so I am making a conscientious effort to change things one month at a time.

These small incremental changes can have a profound effect over time. The benefit (and detrimental effect, in the reverse case) of compounding is something most investors are well aware of. Same concept applies to life and building those marginal gains and compounding them. This article from James Clear and the associated image conveys this point well.

You will notice that most of these challenges are health related. After finance, most of my focus & passion surrounds health. In addition, I am always looking to optimize things so that I can live longer and healthier life. This is a follow up post revisiting all challenges since Jan.

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