I don't really believe in palm readers and crystal balls and tarot cards, but I respond to the need for them. - Stephan Jenkins
I skate cautiously on the thin ice of making predictions and realize it's a fool's errand. But people love to read them and I usually get a few correct along the way.
1) Stocks bounce in early 2019 but continue to slide lower throughout the year as the U.S. slips into a recession and pulls down global markets with it. The S&P 500 falls below 2,000, the Fed is forced to halt rate hikes earlier than expected and may even reverse course and lower interest rates in order to stop the bleeding.
GSB Portfolio Action: Edge into oversold growth stocks in the near term. Ride the bounce and then take profits before the next rate hike cycle begins.
2) The U.S. dollar rally fizzles as trust wanes in the world reserve currency and the ability of the U.S. government to repay its debts. The USD index fails to climb back above 100 and instead drops to a new multi-year low below the 88-level.
GSB Portfolio Action: Increase exposure to asset classes that run inverse to the U.S. dollar.
3) Gold and silver continue the late 2018 trend, with prices pushing higher throughout 2019 on safe-haven demand. Gold climbs above $1,500 per ounce and silver climbs above $20 per ounce.
GSB Portfolio Action: Add to physical bullion positions in both gold and silver during Q1. Add aggressively on a break in the gold price above $1,365 resistance.
4) Mining stocks offer powerful leverage to the gains in gold and silver, with the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) advancing by more than 3 times the advance of the gold price and the VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) advancing by more than 5 times the gold price.
GSB Portfolio Action: We recently added a gold miner that has climbed 10% in the two weeks since we bought shares. We will be looking to add two more gold and silver miners in early 2019, with a focus on explorers that have recently made game-changing high-grade discoveries. We are also targeting a royalty/streaming company that has exposure to a gold explorer that just made one of the largest discoveries in years.
5) Bitcoin (BTC-USD) has one more major price dip, bottoms and then bounces powerfully to push back above $10,000 by year end. Institutional funds finally start flowing into the space as a multitude of new solutions is launched by Fidelity, TD Ameritrade, Bakkt, and others. The first Bitcoin ETF is approved.
GSB Portfolio Action: We reduced exposure last year during the dip, cutting the more speculative/lower market cap coins in the GSB portfolio. But we have been adding Bitcoin and a few other quality coins over the past few months and will continue to buy in tranches on any future dips.
6) Blockchain technology sees a major increase in adoption, having a significant impact across multiple industries.
GSB Portfolio Action: Add one or more positions in companies that are best leveraging blockchain technology in their respective fields or disrupting traditional business models via blockchain.
7) Trump fires Federal Reserve Chair Jerome Powell for hindering economic growth. This sets up a battle between the executive branch and the Federal Reserve. An assassination attempt is made on Trump's life.
GSB Portfolio Action: Safe-haven assets stand to benefit from Trump's war with the Federal Reserve. This battle will also highlight the follies of central planning and benefits of decentralized money and decentralized financial systems whereby the free markets dictate prices/rates.
8) Cannabis is fully legalized in several additional states and across multiple countries in 2019. It is finally de-scheduled federally, with the backing of President Trump and a bi-partisan effort in Congress. Medical uses become mainstream and accepted, driving even strong demand than previously anticipated. This benefits cannabis stocks, which explode to new all-time highs during the back half of the year.
GSB Portfolio Action: We recently added a vertically-integrated cannabis company that grows, processes, and owns dozens of retail outlets. We will further increase exposure during this dip, focusing on companies in the retail, distribution, branding, and compliance sectors of the industry. Hemp producers should also see significant upside in 2019, after the passage of the Federal Farm Bill.
9) Apple (NASDAQ:AAPL) buys Square (NYSE:SQ) in order to build their mobile payment business. The obvious synergies with highly functioning, well-designed hardware makes sense, and Square is currently trading at half its 2018 high. Apple is looking needs to find way to keep up their growth and Square fits the bill.
GSB Portfolio Action: Edge into a position in Square during the current pullback, buying in tranches over the next few months. We also believe our favorite medical device technology company is a takeover target (at a significant premium) in 2019. We recently added shares of this stock as well.
10) Democrats take fight against Donald Trump to the Supreme Court and attempt to impeach him, but ultimately fail.
GSB Portfolio Action: Political instability is likely to add to investor anxiety and keep a lid on any potential rebounds in the stock market. Safe-haven assets and superior monetary platforms such as Bitcoin will benefit in 2019.
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