By Jacob Markowitz
2018 provided no shortage of memorable moments. Facebook took hit after hit for its handling of user data, a Royal Wedding took place in England, there was an historic nuclear summit in North Korea, a Mars Rover took the Red Planet’s first Selfie, and a Supreme Court nomination process gripped the nation.
Let’s take a moment to reflect on the year 2018 from a financial perspective, and perhaps learn a few lessons as we head into the new year.
It certainly was a year to forget for cryptocurrencies. Investors doubtlessly expected some sort of drop-off following Bitcoin’s unprecedented rise at the end of last year, but its performance in 2018 left a bitter taste. Some experts have steadfastly maintained that bitcoin will rebound, just as it did in 2011 and 2013. The Crypto Market’s strong push heading into the holiday season is certainly an encouraging sign this may be the case.
For better or worse, President Trump has held his stance when navigating the waters of global trade, dubbing himself “Tariff Man” as he imposed $250 billion worth of tariffs on Chinese imports. China has of course responded in kind. The two most economically influential countries in the world now have until March 1, 2019 to come to terms or risk escalating this further.
As for the U.S. economy, while the Stock Market was initially able to hold its ground as the Trade War commenced, investors became wary with the speculation and stocks fell respectively. In particular, Tech companies have taken the biggest hit with the increased tariffs.
Speaking of the Stock Market’s rough year, its biggest blow by far was the astounding four spikes in interest rates by the Fed this year, the last of which was announced on December 19th to an already teetering economy. Heading into the holiday season, the Dow Jones is down 9.20%, NASDAQ 8.26%, and the S&P 9.61% (talk about the need for a clean slate heading into the new year).
Saudi Arabia’s Crown Prince Mohammed bin Salman quickly saw his reputation as a modern leader take a turn for the worse after the murder of journalist Jamal Khashoggi. How is this news related to American finance? It turns out that Saudi Arabia is the largest funding source of U.S. startups, with over $11 billion invested since mid-2016. Startups have begun to look elsewhere for funding, leaving a large gap to be filled by seed-stage investors.
If 2019 is anything like 2018, investors should buckle their seat belts and hold on. Everyone from investing novices to the financially savvy need to think of ways to stay ahead of the curve, preparing for the worst even as we hope for the best in order to take advantage of new, potentially spectacular opportunities which are impossible to predict now.
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