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PITTSBURGH (KDKA) – This graph says it all.
The stock market has been a bit like the Phantom’s Revenge roller coaster at Kennywood this year — rising high, then dropping low, multiple times, and heading to a year’s end no better than it began the year.
Fragasso Financial Advisors Chief Financial Officer Michael Godwin said, “2018 has been a very difficult year in the markets.”
Godwin told KDKA money editor Jon Delano on Thursday that he predicts most 401Ks and IRAs will end up with a net loss in 2018.
“It’s going to be tough,” he said.
The most recent sell-off, says Godwin, came because at the G-20 President Trump claimed Chinese trade concessions that China later denied.
“The market doesn’t like uncertainty, and there has been a lot of uncertainty in the markets regarding China and the U.S. in regards to trade,” he said.
But it’s a bigger problem than just China, like higher interest rates from the Federal Reserve and low economic expectations.
See all the red on these screens of stocks.
These are companies that are losing value today, and the problem is they’re losing it every day.
And analysts are concerned that 2019 might be not much better
Guyasuta Investment Advisors CEO Henry Beukema said, “2019 is going to look similar to the volatility we experienced in 2018.”
Beukema says a lot of analysts think 2018 is about as good as it gets.
“Earnings for 2018 are forecast to increase by approximately 19 percent. For 2019 those earnings forecasts have been dialed back to closer to 9 to 10 percent,” he said. “So the feeling is this is as good as it gets.”
But it’s never easy to predict.
“If we have continued strong economic growth, if inflation costs come down, if the Fed stops raising interest rates, 2019 may look a little better than ’18,” says Beukema.
Godwin agrees and says take the long view.
“If you look at a year to year basis, the markets are up 82 percent of the time on a year to year to basis,” notes Godwin.