Summary fo 2014:
Tis the season to be jolly!...and wary.
Santa Yellen came to town.
Europe and middle eastern was a pain such as Greece, Russia and Ukraine...China became our sugar daddy.
OPEC decided to keep the low oil prices to knock out small scale shale and natural gas producers...among other policital reasons.
USA has lead the recovery from 2008 subprime BS, among others, and has kept its improvement steady through monetary infusion while others had less fruitful results.
Most countries are either at war or at economic red alert besides the USA.
The global hard earned capital has poured into the USA safe haven to seek relief. All eyes are on USA right now and other countries performing subpar did not affect the USA market at the 4th quarter...even though we were taught it should.
Another year end tax deduction and profit taking happened about a week ago. Seasonal low volume is reminding us what happened last year when the market dipped hard at end of Jan. With 4 significant dips/corrections for 2014, the stock market was truly volatile but etched its way back to recovery.
Expectations for 2015:
I believe in the US stock market continuation of growth for 2015, however this time it has to come through solid numbers and not through external factors such as locked interest rates or overblown evaulations and analyst estimates. (Ex: Companies are acting smart and lowering their guidance and expectations). Santa Yellen will have to increase interest rates sooner than later and the companies must prove themselves worthy.
I believe there will be a significant dip/correction again in January or February with QE4 results, however thanks to the lowered oil prices for almost 9 months, this dip wont be severe gravity fall for long nor would we have it so severe as this year. It is a blessing the oil prices were low so far to aid us for the shaky first half of 2015. QE4 results should dictate how we are going to do throughout summer. Parking your greens on solid blue companies should provide shelter if you did not withdraw in time this year or for QE1/QE2.
The global economy will struggle and as some will succeed to catch up with the US. (Western europe YES and eastern europe probably NOT). Some catergory of global investments in the US should be leaving to other countries that are improving, which would make US market more vulnerable than now...the low oil prices is focused on sheltering the US market...hmm.
Some investment categories such as real estate (Ex: USA) and energy production will stay and even significantly grow with us, but if youre planning to invest on oil companies when OPEC raises the oil prices, please know that that the oil prices will not go back to their usual 100s but sway around 70s to 80s, and must invest carefully..not all oil/shale companies will recovery to their full potential for 2015 and their recovery will not be as fast as their 2014 dip.
Electronics such as hand-held mobile devices and appliances will feel more pressure from advent of new and more competition such as Xiaomi, Vizio and "cant pronounce the brand name" newcomers. (I would stay away from Samsung). More and more foreign cos. will leave China, as they themselves will focus their resources to increase their QC, PD, defense and technology improvements. USA made and design will be at the center of attention as homeland and foreign consumers appreciate it more. Maintenance and upgrades will be the theme for these types of companies and intially, consumers may feel that pinch from the cos as well. Consumers interests and wants on info will grow more for "what am I actually buying to use or consume?..whats in the ingredients?...next generation consumers are very educated and want to be reassured they are doing their best to prolong their lifespan...also big data is on fire.
Other electronic devices such as semi-conductor or related to defense and offense should do well for 2015 due to an anticipated war games that US is eager to get involved, and Im not talking about broke Ukraine.
I dont see much significant improvements in the small size biotech "miracle" companies but alot of M&A for bigger ones.
The expected inflation for 2015 could be muted a bit due to the lower oil prices, however it is coming and there's nothing wrong with going through the growth cycle of market and economy.
2015 should be less volatile on the 2nd half but 2015 growth should not be amazing for every co. because it is the year of true test of companies. Market growth rate should not be as good as 2013 and 2014, so please choice your stocks selectively. For 2015, Russia's economy wont be ignored by wall st. and should be a concern. Japan will still be in trouble...and this may affect us as well after the oil prices go up.
Numerous consumer goods, retailers, restaurant companies and many others in the US should benefit from the lower oil prices, including travel, automobile, and yes, shopping! We will have a lot of change left in our pockets to spend it back to economy for bolstering. Some restuarants will feel the hit of new or aggressively growing companies such as PLKI vs. KTF.
I would recommend to invest on solid company stocks such as UA, WFC and AAPL, among others during the shaky first half of 2015. The anticipated increase of interest rates are pumping up the banks.
I hope Im correct about my predictions and I hope for people who took the time to read my blog to invest after this new year's dip.
First half, only the strongest will bring you a healthy ROI and the weak will not be sheltered by external factors. Second half should be really groovy.
Wishing you all good health and happy times for 2015!