The top 10 investing moments of 2019
It’s time to say goodbye to 2019, and maybe the longest bull market run we’ve ever seen. If you ignored the news and just looked at the performance of the markets, it’s been a great year for share investing! It was an interesting ride at times, wasn’t it? But let’s face it, those white-knuckle moments on the edge of our seat, with our cursor hovering over “buy”... that’s half the fun of it all, right?
We thought we’d recap some top investing moments to remind you that while it was a bumpy year at times, it could’ve been a lot worse (we’re looking at you, 2018). We do hope that despite some bumps, your Hatch experience made your 2019 a little bit better.
So to mark the end of an intense but stellar year, here are our top 10 investing moments:
10. Cannabis went from north to south
It's been quite the year for the reefer revolution. In 2018, investors smelled the opportunity and hoped to eventually cash in on what was predicted to be a booming market. When 2019 began, it looked as if it would be another green year for the green rush with more than a dozen pot stocks rising by at least 70%.
However, since April, things have gone downhill pretty quickly with the top six publicly traded marijuana companies losing a combined $25 billion in market value. It seems that distribution channels and sales are taking longer to roll out than previously anticipated. This turbulent trip has left investors wondering what's next for what was once the hottest investment on Wall Street.
9. Facebook, nobody wants your Libra
In a nutshell, Libra wanted to do away with the dollar. With over 2 billion users actively using Facebook (FB), Libra aimed to bring all its global users together with a single currency. In Zuckerberg’s words: “The idea behind Libra is that sending money should be as easy and secure as sending a message.”
Zuckerberg’s pitch to Congress turned into a ruthless grilling about Facebook’s data and privacy policies, which they think would only get worse if the company expanded into money matters. Libra Association, a group of global companies that included Visa, PayPal and others has since seen many participants pull out - leaving Libra in limbo. However, experts have said that this near-collapse is more a reflection on the social media company rather than the future of cryptocurrency. So crypto investors, you keep on keeping on.
8. Nervous nellies flock to gold
Gold didn’t skip a beat in 2019, surpassing the $1,500 mark. Investors often flock to gold investments because it’s a good diversifier, and it can perform well in times of market crisis. The price of gold tends to move in a different direction from stocks and can protect parts of an investment portfolio during a market drop.
But it wasn’t the only thing that glittered. Investors added silver, also known as a safe haven, to their portfolios in 2019. With more market volatility expected in 2020, analysts expect investors to continue to show interest in precious metals and ETFs that track their prices. Gold bar anyone?
7. The year of the IPO
After years of sporadic initial public offerings (IPOs), 2019 was a banner year for well-known billion-dollar companies hitting the US share markets. More than 200 private companies were in the IPO backlog - record highs the market hadn’t ever seen before.
How have these companies fared since making their public debuts? Well, it’s been a mixed bag. CrowdStrike (CRWD), Zoom Video Communications (ZM), and Beyond Meat (BYND) had a great year, but it hasn’t been smooth sailing for everyone. Uber (UBER), Lyft (LYFT), Jumia (JMIA), Slack (WORK) and Peloton (PTON) are all down from their IPO prices, and investors are increasingly showing caution with newly listed IPOs from highly valued, loss-making businesses. SmileDirectClub (SDC)’s share price closed down 27.5% from its initial offering price of $23, the worst first-day showing in about two decades among IPOs that raised more than $500 million. So what does all this tell us as we head into 2020? That the markets can be a little choppy when it comes to unprofitable growth companies with big valuations.
6. Trump’s made-for-TV trade war keeps investors guessing
In 2019, the Donald brought his love of show business to trade talks with China. Alternating between displays of camaraderie and anger with Beijing; the markets can't keep track of his ambitious goals for a trade pact contrasted with even bigger threats if China doesn’t meet his terms. Okay cool, but what’s it all about? Trump is accusing China of unfair trading practices and intellectual property theft.
The trade war has seen the US and China slap tariffs on hundreds of billions of dollars worth of each other's goods. Negotiations are ongoing, but more than a year and a half into the biggest trade war in modern history, Trump’s approach hasn’t yet produced the results he’s after. The last we heard, both sides are aiming to sign a deal in January. Can we bear to watch this space?
5. Streaming battles heat up
In 2019, Big Media and Big Tech waged an all-out war to fight for your attention and your dollar bills. HBO and NBC joined the party and then came Apple TV+ (AAPL) and Disney+ (DIS). So many plus signs, so little time! What they all share in common is that they have Netflix and Amazon in their sights.
Netflix (NFLX) stock, which had a rough few months ahead of all of the Spring launches, actually started climbing in mid-November - suggesting that panic over a mass subscriber exodus to its new competitors had already subsided.
As long as you don’t mind going to different places to find the shows you like, the streaming wars look pretty good for you as a viewer. But these wars look like they’ll be costly for those competing for your eyeballs. With standoffs over shows like Seinfeld, The Office, and Friends for exclusive streaming access, and billions spent on astronomically expensive original content, this war is just heating up.
4. Beyond Meat goes public with a bang
Plant-based meat company Beyond Meat (BYND) had one of the most explosive IPOs of 2019. The company made its share market debut with an IPO price of $25 per share. But insatiable demand quickly sent the share price ballistic. Over the next few months, shares rose to an eye-watering $234 per share, a post IPO rise of more than 800%!
Beyond Meat uses proteins from beans and vegetable fats like coconut oil to create a more sustainable food alternative to farmed food. They’ve gained strong sales traction with inclusion on big-name menus like McDonald (MCD)’s and Dunkin (DNKN). But in October, with many inside investors free to offload their shares, even an upbeat earnings report couldn’t stop the vegan burger maker's share price tanking. Shares were trading at around $75 per share in early December, and many investors are hoping that 2020 sees the fake meat trend continues to influence menus - and their portfolios - positively.
3. WeWork’s $40 billion meltdown
WeWork has been in turmoil since it failed to sell the public on a monster We listing in September, leading to an internet meltdown. Rescued by SoftBank, the coworking company cut its valuation down to as low as $8 billion from $47 billion, removed Adam Neumann as CEO, and delayed its initial public offering indefinitely.
The antics that led to Neumann stepping down from his CEO role included reports of him smoking weed on a private jet, serving employees tequila shots after discussing layoffs, and trademarking the term “We” and then forcing WeWork to buy it for $5.9 million. Oops.
SoftBank, WeWork’s biggest investor, took control of the company in October and reportedly sent Neumann packing with a $1.7 billion package. His successors, Artie Minson and Sebastian Gunningham, have stepped into the role of co-CEOs of WeWork as it attempts to navigate a very different future.
2. The S&P 500 index is white-hot
The S&P 500 index is on fire returning nearly 26% in gains since the start of the year. It has marched steadily higher throughout 2019, dodging geopolitical minefields, including a trade war and Brexit, and is still on track for its best calendar-year performance since 2013.
Who are the S&P 500 winners in 2019? As of December 4, just 65 shares in the S&P 500 were down for the year while 374 were up at least 10%. AMD, Xerox, Lam Research, and Chipotle Mexican Grill were the index’s best performers, with all up more than 88% for 2019. The tech sector is also up more than 30% in 2019, led by Lam Research (LRCX) and KLA Corp (KLAC). Tech giants Apple (AAPL) and Microsoft (MSFT) are both up about 74% and 52% respectively.
Picking individual shares can be time-consuming, which is why many investors turn to exchange-traded funds which bundle many stocks together. When individual companies come together into a diversified portfolio, they have a lot of power: The S&P 500 index - which includes approximately 500 of the largest companies in the US - has posted an average annual return of nearly 10% since 1928. Two of the more popular S&P 500 ETFs on Hatch include Vanguard’s (VOO) and SPDR’s (SPY).
1. Tesla: no pain, no gain?
Oh, the drama! 2019 has been a rollercoaster ride for investors in one of the most polarising companies on the planet. The first half of this year saw Tesla (TSLA)’s share price - and our hearts - drop thanks to missed production targets and a skeptical Wall Street. Since it's 2019 low at $176 per share, Tesla has steadily climbed its way back and was further helped by blockbuster third-quarter earnings, which exceeded everyone's expectations. It recently crossed the $360 per share barrier, hitting a year-to-date high and we have no doubt that there's a mad dash back at HQ to deliver as many vehicles as possible during the final month of 2019.
Never far from controversy, Elon Musk claims he wants to drive humanity forward and is in it for the long haul. Between running rocket maker SpaceX, working on an underground transportation system with The Boring Company, and reinventing the mass-market auto industry, it’s all in a day’s work for this modern-day enigma. Also in it for the long run are many Tesla investors are choosing to stay calm and invest on.
Bring on 2020 already
We can’t predict what’s going to happen, but there’s a lot of murmurings that it’s not going to be easy. It’s no reason for worry or panic though, from a long-term investing perspective; volatile markets can be a great time for investors to take advantage of shares at lower prices. If you’ve been waiting to invest, 2020 might be the year for you to get off the sidelines and into the fray!