The “double-twenty” year is almost here, and that means one thing: checking with market experts to see what will be the potentially strongest kinds of stocks for the upcoming year. It’s not about picking individual winners as much as taking a look at what general areas of the economy stand to do well, even if there’s a recession or minor downturn in the markets. As always, there are a few perennial champions, like retail, and a few surprises for the year. Here’s a quick overview of why three key sectors of the economy could produce some very strong buying possibilities for people who like to invest in the stock market:
Precious Metals
With the precious metals like gold and silver, there’s always a big potential in years when the economy is perceived to be “ready for a downturn,” as it is now. Most economists say one of two things. They either think 2020 will be a very bad year for the economy or they point out that lots of people expect it to be one. For the precious metal’s markets, either of those will do. Truly bad news for the economy could propel gold and silver prices skyward. But even the lingering perception of “bad news is just around the corner” is also enough to buoy the prices of precious metals.
Retail
The consumer-based sectors of the economy have always done well in the long-term. That’s because people continue to buy things even when times are bad. They just buy different things. And when bad times subside, pent up emotions cause a surge in consumer activity. Owners of retail stocks could be very big winners in 2020 as long as the population continues to grow and online sales of consumer goods trend upward, as they have for several consecutive years.
All the major retailers are jockeying for the number one position among the giants, and they’re doing so with consumer-friendly policies. For example, according to the Walmart return policy electronics require a receipt and should be brought back within 15 days of purchase. When the total price is less than $25, you can get cash back. As long as customers continue to file into the big retail stores, stock prices in this competitive sector will continue to rise.
Automotive
The auto industry is a quirky piece of the economy, and it always has been. Even when car companies aren’t having their best years, the “zero” years tend to deliver very good vehicle sales numbers. So, with 2020 around the corner, expect first-quarter auto and truck sales to be better than expected. Some market analysts think that consumers have a certain fondness for the so-called “decade years,” like 1990, 2000, 2010 and 2020. Historically, car sales usually rise when the fourth digit of a year changes from a 9 to a zero.
Whether that theory holds or not, the first few months of a new model year are also a good time for auto manufacturer stock prices. Buyers usually wait for the new models, which are released in October, November and December, to be on the market for a few months before buying. January through March are often the best months for auto sales.
Disclaimer: This content does not necessarily represent the views of IWB.