Speculative advice

Investors often classify stocks into two categories: value or growth.

The first category includes traditional companies, with stocks that have fairly reasonable valuations and often pay high dividends. Companies are generally well-established and are active in "relatively" stable and predictable industries. Managers are often experienced people with many years of experience.

The second category is made up of rather young, high-growth companies, often with high valuations, driven by investors' hopes of seeing revenues and profits increase sharply in the future. These companies are often in new markets (often technology or biotechnology) where the risks of disruption and competition are remarkably high, and where the visibility of future revenues is not always clear.

2019 was a surprising year in many ways. The predictions of many banks in early 2019 were mostly correct: economic slowdown and high uncertainties due to Brexit and the trade war. Logical conclusions: the banks recommended caution on equities and short durations on bonds. While these predictions turned out to be correct, the result on the markets was very different from that expected: 2019 will have been a record year in terms of performance, both for stocks and bonds. Basically, investors should have been overweight in stocks and have bonds with the longest possible maturities.

So what about 2020?

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