Morningstar reported yesterday that it was the worst year for the FTSE100 since 2008. The index was down 12.5% over the year, starting at 7648, and ending at 6728. Although disappointing, I don’t think it was necessarily anything exceptional.
It peaked in May at about 7877, a decline of 14.6%. So we’re not in a bear market yet, although we have had a correction. The support levels established in March 2018 failed and we’re in a distinct downtrend, so it wouldn’t surprise me if further falls are on the cards.
My portfolio is down 19.9% this year, so that’s obviously a huge disappointment to me. Undoubtedly most people did much better than me. Maybe I should have stuck to a Greenblatt Screen, or something. This year I have mostly been using mechanical criteria that I have seen on Stockopedia.
My prediction for 2019: the stock market will end up. Let’s see if I’m right, shall we? My reasoning is that Stockopdeia reports that the FTSE is on a trailing PE of 12.8. Although not screaming value, it’s pretty damn reasonable. Also, 2018 was a down year, which makes 2019 more likely to be an up year. There can be multiple down years, but they’re not all that common. I think we’d need more of a mess for that to happen.
Can the market end down on 2019? Yes, of course it can. The market can do anything it wants. But I think that the odds favour it being an up year.
Stay safe out there.