CNBC’s Millionaire Survey measured the sentiment of wealthy individuals in America on where they think the economy is headed, and the majority expressed optimism heading into 2020.
Per a CNBC report, “39% of millionaires who think the economy will weaken next year represents a significant rise, of 14%, from the Spring survey, but the majority of the wealthy expect the economy to “be the same” (38%) or “get stronger” (27%).”
“It has become increasingly difficult to understand how the economy and markets will perform in the future. Adding to that difficulty is an election year in which both parties have become hyper-polarized. To me, that looks like a perfect opportunity for volatility to strike, but volatility does not guarantee we will end the year either up or down,” said Doug Boneparth, president of wealth management firm Bone Fide Wealth.
Markets have been riding high off the euphoria of a U.S.-China trade deal that sparked a year-end rally, but can this positivity sustain itself heading into 2020?
“We think confidence will ultimately translate into the public getting this enthusiasm for stocks which could cause prices to move as high as 3,950,” said BTIG’s Julian Emanuel, the firm’s chief equity and derivatives strategist told CNBC’s “Trading Nation.”
Despite the gains, Emmanuel thinks that investors still haven’t fully harnessed the power of equities just yet despite the extended bull market the past decade. 2020 may finally be the year investors dive headfirst into U.S. equities.
“In any great bull market, whether you think of technology in 2000 or houses over the course of the last couple of decades, it always ends or at least gets closer to the end when the public gets enthusiastic,” Emmanuel added. “We think this is the year.”
A Passive Option for 2020
Earlier this year, Moody’s Investors Service estimated that passive funds were poised to overtake active funds in terms of market share by the year 2021. Even with lower fees to entice investors, it may not be enough to stem the tide of a strong push toward passive management funds.
One fund to take advantage of is the SPDR S&P 500 ETF (NYSEArca: SPY), which boasts over $300 billion in assets.
Key features of the fund:
- The SPDR® S&P 500® ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index (the “Index”)
- The S&P 500 Index is a diversified large cap U.S. index that holds companies across all eleven GICS sectors
- Launched in January 1993, SPY was the very first ETF listed in the United States
SPY doesn’t merely lend itself to the fly-by-night trader who feeds off the adrenaline rush of getting in and out of securities with requisite speed. It’s also flush with investors who are in it for the long haul–the buy-and-hold investor who values SPY for its liquidity in the markets, among other things.
SPY is up about 31% YTD according to Morningstar performance numbers—a strong rebound after falling 4.56% in 2018.
For more market trends, visit ETF Trends.