Welcome 2015!
We are coming off a solid economic performance in 2014 marked by improvements in hiring, wages and corporate investments. It has been a magnificent year for both the stock and bond markets, even with a slight wobble in the equity markets at the end of the year. U.S. stocks were bolstered by an expanding, if uneven, economic recovery, surprising strong earnings growth and a Federal Reserve that remained accommodative even as it wound down a post-crisis stimulus program.
We expect the Federal Reserve to increase rates this year in a slow and steady approach, which should not diminish the appeal for U.S. stocks. The average forecast for stocks in 2015—a year when the bull market will most likely turn six years old—is around 10%. In this context, another quick shake out where stocks pull back hard without creating a lasting disturbance to economic fundamentals would probably be the healthiest, most welcome outcome for long-term investors. Thanks for taking a look and all the best health, happiness and prosperity in the new year!
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