It could be worse: An optimist’s guide to investing in 2019

It’s one thing for Warren Buffett to say, as he famously did, that the key to good investing is to “be fearful when others are greedy and greedy when others are fearful”; It’s another thing to have the guts to do it. But if there was ever a time when markets smelled like fear, with a swift and indiscriminate shift to risk-off sentiment, it’s now.

After touching all-time highs just months ago, both the S&P 500 and the S&P/TSX composite index are ending 2018 in a tailspin, having plunged nine and 13 per cent into the red, respectively. In Europe and the U.K., things haven’t been much better, while in emerging markets, the bloodbath has been worse: the broad MSCI EM index has dropped more than 15 per cent in 2018, while China’s Shanghai composite lost nearly a quarter of its value.

In short, it has been a world of bad news. On those rare occasions when hope has managed to poke its head out of the gloom — the U.S.-China trade truce, for instance, reached at the G20 in early December — investors just haven’t been buying it.