It’s nice to think that a new year is a new beginning, but of course, the world has just taken another turn about the sun, and the markets are responding to the weight and shape of everything behind it with as much volatility as ever.
The year began with the Australian dollar taking a nasty fall, dropping more than three percent on 3 January to only 67.49 US cents – a low not seen since 2009. In slightly better news, the dollar recovered later in the day, but the cause of the sudden crash is still a matter of speculation – was it a revenue warning from Apple (attributed to weak China sales) or thin trading in general?
James Mickleboro of The Motley Fool warns that the dollar could fall further: bad news for importers but with potential for exporters and businesses like Appen (ASX: APX) which derive most of their revenue offshore in US dollars.
The Motley Fool has offered suggestions before on Australian stocks with a global outlook that might offer better returns when the dollar is weaker, including Cochlear (ASX: COH) and Macquarie Group (ASX: MQG).
Naturally, the fortunes of the Australian dollar are not the only criteria when choosing investment opportunities, especially with the US-China trade war weakening demand and production activity worldwide.
So where can you turn? At present, the market is favouring gold and oil – the latter on the back of OPEC’s drop in oil production – as well as the energy, tech and communication services sectors.
As January progresses and companies wake up from their brief Christmas lull, there’ll be more to unfold.
If you would like to speak with a professional investment adviser about how your portfolio is positioned for the year ahead, contact United Global Capital today on 03 8657 7640 or email [email protected] for a no cost, no obligation consultation.