3 Investment Lessons Learned in 2019

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SPY – SPY is up 25% year to date. That we know. Now let’s discuss 3 additional lessons learned this year and how it will help us chart a course to greater investment success in 2020.

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This is an annual tradition of mine. To look back at the investment year that was to find the key lessons learned, that help us become smarter investors in the years ahead.

Meaning that history has a way of repeating itself. So the more we understand what worked in the past…the better we can invest in the future.

After I review these 3 key lessons from 2019 I will also give a preview of my 2020 stock market outlook. So make sure you stay tuned for that vital information.

Lesson #1: Price Action is NOT Reality

The battle between fundamental and technical investors goes back a long, long way. Often these people with disparate views can find a common ground whereby we say that fundamentals tell you what stocks to buy and technicals tells you when. But even that view is flawed.

What I mean is to take a look at the 20% sell off in stocks from Q4 2018. Technically speaking we reached bear market territory on Christmas Eve. Those with a technical point of you would see this as Santa serving up a lump of coal to all investors with more downside ahead.

However, fundamental investors saw it 180 degrees in the other direction. This was one of the greatest gifts of all.


Because there was not any serious fundamental information pointing south. Thus, the sell off was unfounded leading fundamental investors to back up the truck and buy stocks on the cheap. This produced a very happy and healthy new year with 25% gains and counting.

In a nutshell, fundamentals should be the main driver of your investment outlook. Not price action and technicals.

Lesson #2: Investors Can Get Fixated on Just 1 Thing

Think about how complex the economy is and why we have so many different monthly reports: Manufacturing, Services, Employment, Retail, Sentiment, Retail Sales, Inflation and on and on.

Then layer on top the Fed, politics, price action…the list of things that influences the economy and stock market is nearly endless.

Typically investors have their eye on all these things to help paint a picture of how bullish or bearish they should be. However, there are times that the field of vision gets narrowed to just one thing.

You know that right now I am talking about US-China trade. And that has been the primary, and seemingly, solo driver of stock prices for the past few months.

This is not that unusual. There are often times where Fed decisions to raise or lower rates is the only game in town.

The point is to appreciate when this myopic view takes place and trade accordingly. Because if not, then you will likely be on the wrong side of market action.

Lesson #3: Fool Me Once, Shame On You. But Fool Me Twice, Shame on Me

This expression is another interesting market phenomena. That we investors start to become numb to bad news over time and will start ignoring it altogether. The most recent example of that is with China Trade.

Stocks have tumbled NUMEROUS times in the past year on just about every negative trade Tweet and headline. And not long after you sold shares, the market bounced higher…often to new record highs.

The communal lesson learned is to not get faked out by this news. And assume a positive outcome for stocks until proven otherwise. That certainly is the handbook that investors are trading by now as stocks retraced to the all-time highs this week even though the trade deal seems far from ironed out.

Looking Ahead to 2020

Beyond doing the annual lessons learned commentary, I like to follow that up with my Stock Market Outlook. Because if we don’t understand the past…it’s kind of hard to know what to do in the future.

Right now I am actively getting my thoughts together on the 2020 stock market outlook to be unveiled at my December 10th webinar.

I still believe the bull market is in place. But the hefty 25% gains from 2019 will not be repeated. Expect more typical 5-10% overall gains for market indices.

Certainly given the old age of this bull run, we all need to sleep with one eye open in case the next bear wants to come out of hibernation. So I will discuss how to be on watchful alert and how to shift gears if need be.

Plus you have to realize that Presidential election years like 2020 can often throw a curve ball to investors. Swing wrong and you strike out. So I will cover that vital topic as well.

Overall I see stocks moving slightly higher. However, a different breed of stock is likely to take the lead and significantly outperform. I will share insights on the formula I see to find those best stocks in 2020.

Again, I will be sharing it all in my upcoming free webinar December 10th. Many folks have already registered from the invitation sent out Friday. However, a few spots are still available. Just click the link below if you want to join me for this live webinar.

Register for 2020 Stock Market Outlook Webinar

Wishing you a world of investment success!

Steve Reitmeister

…but my friends call me Reity (pronounced “Righty”)
CEO, Stock News Network

Editor, Reitmeister Total Return


SPY shares were trading at $315.07 per share on Friday afternoon, up $3.05 (+0.98%). Year-to-date, SPY has gained 27.83%, versus a 27.83% rise in the benchmark S&P 500 index during the same period.


About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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