Market Strategist: Here's What Matters Most For Investors In 2019

Plenty of traders are celebrating the holidays this week, but Monday's trading action suggests the market sell-off isn’t observing any holidays. Benzinga recently spoke with TD Ameritrade chief market strategist JJ Kinahan about the issues spooking the markets that are legitimate concerns heading into 2019.

The recent market sell-off has the SPDR S&P 500 ETF Trust SPY on track to finish the year down 10.3 percent.

The government shutdown that began last week due to a political dispute about funding for President Donald Trump’s border wall with Mexico likely will not have a lasting impact, Kinahan said, adding that the dispute will be settled sooner or latter because it must be.

Biggest Concern

Conversely, Kinahan said the ongoing trade war and the unpredictability of Trump’s tariffs and retaliatory tariffs by China and other nations has created a level of uncertainty in the market that could have a lasting impact.

“When you know the rules of the game, you can win,” Kinahan said. “When you don't know what the rules of the game are, it’s hard to win.”

Market volatility will likely continue until CEOs find some long-term clarity on the tariff situation and can feel comfortable about their business projections, he said.

Pivoting to the Federal Reserve's monetary policy, Kinahan said the Fed has been following and will continue to follow its mandate — employment and inflation.

Trading Advice

Kinahan has two pieces of advice for investors who are struggling in a soft, volatile market.

First, Kinahan said there’s no reason to make a rash decision at this point.

“You may not want to put fresh money toward things, but I don't think it’s a time to say 'oh my god, I've got to get out of everything,’” he said.

Instead, Kinahan said investors feeling a bit uncomfortable should consider dialing back their exposure to stocks by 10-15 percent.

Second, Kinahan said that it’s very important to be aware of investment time horizons during volatile periods.

For example, he said short-term traders may see the 7.3-percent gain in Nike, Inc. NKE on Friday following its earnings report as a sign of bullish momentum. For longer-term investors, there may be more factors to consider.

“Longer-term, if we go to higher tariffs, one of the areas they grew significantly was China,” Kinahan said of Nike.

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