The Motley Fool

Where I’d be investing my money in 2020

As we near the end of 2019, I think it’s safe to say that it hasn’t been the year that many of us expected we’d see on many fronts.

The Reserve Bank of Australia (RBA) and other central banks around the world continue to slash interest rates beyond already record lows, while the US–China trade war has continued to drag on into the second half of the year.

Talks of a market crash have been overblown after big share market falls in February, and we’ve seen the Afterpay Touch Group Ltd  (ASX: APT) and its fellow WAAAX stocks defy expectations and surge higher.

So, with this in mind, here are some ideas of how to position your portfolio in 2020, given what we’re seeing in the markets as we head towards the end of 2019.

Some defensive exposure could be a good thing

As we’ve seen in the past, periods of uncertainty in geopolitics and global markets have seen defensive stocks such as the ASX gold miners perform strongly in 2019.

The Newcrest Mining Ltd (ASX: NCM) share price has rocketed more than 50% so far this year while we’ve seen strong gains from Resolute Mining Ltd  (ASX: RSG).

If you’re not prepared to bet your hard-earned cash on the volatility of US–China relations, another alternative could be diversifying into countercyclical industries such as the Energy or Consumer Staples sectors.

With this in mind, the AGL Energy Ltd  (ASX: AGL) or Coles Group Ltd  (ASX: COL) share prices could be good value before the end of the year and both offer good defensive benefits to the right portfolio. 

But tech share prices still have growth left

As mentioned, the WAAAX stocks have rocketed higher and been real outperformers in 2019 so far.

The Afterpay share price has led the tech group higher with 166% gains since the start of January while Appen Ltd  (ASX: APX) and Altium Ltd  (ASX: ALU) shares have also outperformed in 2019.

If the economic fundamentals remain intact into the first half of 2020, I’d expect to see the tech share prices continue to surge higher – particularly if we see a resolution to the trade war.

Foolish takeaway

It’s anyone’s guess what is coming our way on the ASX in 2020, but it helps to be aware of trends and keep an eye out for indicators.

While we see a lot of doom-and-gloom commentary about the inversion of the yield curve and an impending recession, the reality is we could have a further 2–3 years before markets see a correction.

By investing in a few defensive stocks in late 2019, you could setup your portfolio for 2020 and still gain the upside of a strong ASX market performance in 2020 at the same time.

For those who want more income in their portfolios next year, here are three high-yield stocks to get you started in 2019.

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Altium. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!