Investing in 2020: shares, bonds or cash?


After the wonderful stock market year 2019 you naturally ask yourself where you should put your money in 2020. In shares? Is it smarter to switch to bonds and bitcoins? Or is it time to hold cash? RTL Z toured the fields.

In the past year you were on the right track with almost everything: stocks, bonds, bitcoins, houses and commodities such as oil, gold and silver. Will 2020 be that beautiful again?

So many banks and analysts, so many tastes, but the specialists we spoke with generally see the most perspective in equities. In addition, most are on the cautious side. This is related to the often modest expectations of economic growth. Some analysts see room for windfalls.

In bonds, most analysts who consulted RTL Z see little perspective, whether they are US bonds or corporate bonds.

Some analysts are more cautious and recommend keeping part of your assets in cash so that you can profit if stock prices fall.

“We are still looking at coffee grounds, but we are in a good position. At the moment I do not see any bears on the road that we should be concerned about. The AEX will continue to play a bit,” says RTL Z stock market commentator Jacob Schoenmaker.

“We are going towards a lower economic growth, but that is priced in and therefore there is room for windfalls”. Schoenmaker expects that the ten-year interest rate on Dutch government bonds will not fall further and will even rise above zero.

“That is not necessarily good for equities, but as long as the interest rate remains below 1 percent, that does not have to be insurmountable for the stock market. As long as the interest rate rise is only a sign of force, for example due to growth expectations that are better than expected,” says Schoenmaker.

Brexit and the trade war between the US and China seem to end up sizzling, he thinks. With regard to the US presidential election in November, Trump is in the best position, says Schoenmaker. Investors are happy with him as president.

He is less satisfied with bonds, although he does not expect a bloodbath. From the point of view of risk diversification, you should always be a bit in bonds, he says, but Schoenmaker prefers cash. He is thinking of at least 30 to 50 percent of the portfolio.

“If there is a slump in the stock market, put that money back in the stock market. The success of Warren Buffet was also the fact that he was one of the few to have cash available to sell on the stock market in the event of a sale. hit “, Schoenmaker knows.

“The global economy is at a crossroads,” says Valentijn van Nieuwenhuijzen, chief investment officer of NN Investment (NNIP). Political uncertainty in the form of trade disputes, social unrest, the climate and the question of how the negotiations on the relationship between the EU and the British work out can lead to a fall in economic growth. NN even speaks of a possible recession. For shares, that would be bad news.

However, if the political risks decrease or if governments start to stimulate the economy, a completely different scenario will arise. Shares then become more interesting. That applies in particular to shares from the euro zone and Japan, says Van Nieuwenhuijzen. Within Europe, he prefers cyclical stocks, that is, shares of companies that profit considerably if economic growth picks up.

In any case, NN Investment Partners is charmed by sustainable shares. After all, these will benefit if society focuses more on sustainability.

NN is also positive about green bonds. It expects more to be spent. For example, governments will spend more on cleaner energy and smart cities, among other things. In addition, more and more companies are issuing green bonds.

Investing in green bonds is also a way to select companies that are innovative in their outlook and are less affected by climate risks, says Edith Siermann, Head of Responsible Investing at NNIP.

About the author

Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at [email protected]

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