Paulsen thinks that we could see a reversing trend in bearish indicators. If the economic reports become even softer, we might see the market celebrate. Softer data would probably be able to convince the Fed and bond vigilantes (AGG) (BND) that rates shouldn’t go up. In the absence of higher rates, markets can keep rising. Paulsen also thinks that after the recent sell-off, the valuations are at a much more sustainable level. These factors could help bring the S&P 500 to all-time highs in the first half of 2019. Currently, Paulsen likes emerging markets (EEM), energy (XLE), and other beaten-down sections of the market.
Among equities, focusing on companies that have grown their earnings consistently and have solid balance sheets is usually a good strategy. In late cycles, investors can also increase their allocations to cash, fixed income (TLT), and precious metals (GLD) (SLV).
To learn more, read Dalio’s Advice on How to Prepare for the Next Downturn.
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View more information: https://marketrealist.com/2018/12/if-this-is-the-deep-panic-jim-paulsen-talked-about-start-buying/