Thank you for completing my survey! I value your input and will take your answers into consideration for future blog posts. As promised, here are my predictions for 2015:
I expect 2015 to be even stronger than 2014 and wouldn’t be surprised if the S&P 500 rallied 20% – 25% next year. Here’s why:
The Fed will likely maintain its 0% interest rate policy for all of 2015. The Fed has its hands tied because if it raises key interest rates it will artificially strengthen the U.S. dollar even more and encourage deflation. Low interest rates encourage money to flow into the stock market and for companies to buy their stock back. And we are entering the third year of the Presidential term, which tends to be a strong year for the market. This year, Presidential hopefuls will start running around and making promises for how they plan to fix the country. This tends to boost sentiment on both Main Street and Wall Street.
I have my eye on the Technology and Healthcare sectors, especially biotech companies. ObamaCare has put healthcare spending at center stage, and any biotech company that develops a cheaper substitute for costly medical procedures will be very successful. Beyond that, I expect small- and mid-cap stocks to make a comeback. The stronger U.S. dollar is pinching the “profits” of big multi-national companies, so smaller companies that aren’t paid in eroding currencies are looking more attractive than ever.
While we’ll likely see more corrections in 2015 due to increasing HFT activity, I’d view any near-term pullbacks as buying opportunities. The bottom line is that 2015 is shaping up to be another double-digit year for the S&P 500.
Thank you again for participating, and happy holidays! I will be in touch on Monday morning with the latest Stock of the Day.