Finance 4 family, What to Know and What to Do in 2015
5 Things to Know in 2015
1. Central Banks Diverge: Dollar Likely Higher
We expect divergence to continue for at least the next several months. Continued dollar strength will exert downward pressure on commodities, inflation and the earnings of U.S. exporters.
2. Fed Ready to Hike – But Rates to Remain Low
Short-term bonds will be most affected by higher rates, while longer-term yields should inch up at a gentler pace. Stocks may see brief stutters, but should recover.
3. U.S. Economy: Inching Up, Not Breaking Out
The U.S. is still stronger than other developed economies. We expect growth in the area of 2.5% to 2.75% this year—enough to support modest growth in stocks.
4. Inflation: Still Low – In Some Places, Too Low
Tepid U.S. inflation is good news for American businesses and consumers. Ultra-low inflation in Europe should lead to continued stock-friendly policy from the ECB.
5. Expect Stocks’ Bumpy Ride to Continue
While volatility will be higher than the unusually low levels of the past few years, market dips may present buying opportunities for long-term investors.
5 Things Investors Should Consider in 2015
1. Prefer Stocks Over Bonds, But Be Choosy
2. Look Overseas for Opportunities
Most stock market bargains live outside the U.S. Ensure you’re taking advantage. (see image below)
3. Watch Your Step in Bonds
With rising interest rates, bond principal is at risk. Be wary of shorter maturities in particular, which would be most affected by a Fed rate hike.
4. Resist the Urge to Exit
It’s important to hold some cash, but too much can set you back. Cash comes with a cost after inflation and taxes.
5. Seek Growth in a Low-Growth World
Expand beyond traditional assets in an effort to optimize your portfolio’s results