59 Financial Experts Just Revealed What 2015 Could Bring
Benzinga recently asked more than 50 experts what they'll be watching in the New Year.
All responses in italics are direct quotes and shortened for this article. The full list of predictions can be downloaded for free here.
So...what's your best trading and investing tip going into 2015?
Stay long US stocks, particularly big brand name firms in tech, media and finance, as seasonal, cyclical and fundamental forces remain positive. Take a position in iShares MSCI Germany Index Fund (ETF) (NYSE: EWG) and iShares MSCI Japan ETF (NYSE: EWJ) to benefit from all-out stimulus coming in both countries.
Doug Kass, Seabreeze Partners Management (@dougkass)
My advice is to trade opportunistically and to limit the size of your long term holdings as 2015 could bring unprecedented volatility.
Maintain above average cash reserves and stay diversified among industry sectors.
I see real GDP continuing to remain at or above 3 percent into 2015, with the S&P staying in modestly bullish mode until early to mid-summer. The Fed will begin raising rates around then, making the latter half of the year a more volatile trading environment, but I think 2015 will end a few percentage points higher than 2014. In short, go long the first half of the year, and stay market-neutral the latter half.
Ignore all predictions and forecasts. They are simply guesses and risking your cash on a guess is foolhardy. React to what the market does rather than trying to predict what might happen.
Dave Lauer, KOR Group (@dlauer)
Don't try to compete with the "machines" - invest for longer-term movements rather than trying to scalp and arb. HFT has that part of the market cornered, and there's little point to trying to compete with it anymore. Instead find your edge and focus on it.
Karl Setzer, MaxYield Grain (@ksetzergrains)
Be prepared. The volatility in commodities will only increase. Windows of opportunity will be narrow.
David D. Tawil, Maglan Capital (@MaglanCapital)
For purposes of investing, to generate outsized returns you must be contrarian. Appreciate the environment (e.g. you can't fight the Fed). Be aggressive but humble.
Cate Long, Puerto Rico Clearinghouse (@cate_long)
Yields in the municipal bond market will likely remain historically low in 2015. Unless you are in a very high tax bracket it might be best to wait for higher rates unless you are willing to invest in more risky issuers. Investors typically don't trade bonds but instead buy and hold them to maturity. Its much like buying a house -- be patient and wait to buy bonds that you want to hold for the long term.
Dave Landry, Expert Trader (@davelandryTrdr)
Keep things simple. Trade only in the direction of the OBVIOUS trend on pullbacks. Wait for setups. If there are no setups, then do not trade. And, if you do have setups, make sure you wait for entries.
Have a money management and position management plan in place BEFORE you place your trade. Then, follow that plan. Plan your trade and trade your plan.
William Decker, Decker Wealth Management
Avoid the temptation to let emotions and excitement (positive or negative) influence your portfolio management decisions. Pay attention to what we can know, be aware of what we can't know, & make intelligent informed decisions based on the data.
Jeffrey A. Hirsch, StockTrader's Almanac (@AlmanacTrader)
Biotech looks like one of the sectors of the future. I like iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: IBB). In general, I am looking for a positive 2015 with most upside in first half and flat second half.
Gary Anderson, 3DPrintingStocks.com (@3DPrintingStock)
Read what the analysts have to say- then do the opposite.
David Katz, TradingFibz (@TradingFibz)
My job as an educator and mentor in the live screen share trading room is to identify the trend on both an intraday and seek the earlier entry for the swing trader. Here is my two sense to get you there. Keep it simple. Cease from trying to find the holy grail to trading. There is none. Know one thing well and don't feel you have to track so many markets. Whatever type of trader you may be, following the trend will always reap you more profit in the end, whichever direction it is moving.
Ethan Premock, Hamzei Analytics (@MockTrade)
The best advice I can offer is to learn to...wait for trade entries to come to you, along with also having more of an open mind for two-way price action and volatility in 2015, rather than expecting the one way market of the past two years to continue.
My best trading advice going into 2015 is to keep your stocks close, and your stops tighter... Naysayers have been proved wrong year after year. Relentless quantitative easing (QE) and zero interest rate policy (ZIRP) have fueled demand, while obfuscating price discovery.
Fari Hamzei, Hamzei Analytics (@HamzeiAnalytics)
If QE continues, keep your bet size small and trade short term. If you are trading options, watch your overall portfolio delta & imp vols. Short-term market timing will be crucial.
Steve Burns, New Trader U (@SJosephBurns)
Buy the deep dips on the SPDR S&P 500 ETF Trust (NYSE: SPY). The 50 day and the 200 day moving averages or if the RSI on the daily chart is at 30. These have been sweet spots for long entries for years now.
If I have to summarize everything in one word that would be CAUTION. The market indices have had an ascending move throughout 2013 and 2014, the monthly charts almost look climactic. The daily charts set new highs almost everyday. The market is getting extended and yet indefatigable. Therefore moving forward we need to take it one day at a time, look at the general technical picture and trade cautiously.
Paul Theron, Vestact (@paul_vestact)
Stay long big-cap stocks in the healthcare, consumer and technology sectors, especially those with significant international operations.
Peter W. Tuz, Chase Growth And Chase Mid-Cap Growth Funds
Be nimble. Focus your investments on U.S. based stocks. Hold fewer bonds than usual, but more cash.
Dirk Friczewsky (@FXDIRK)
Traders usually stick to their markets and pairs and "do not" always change the horse > that's why I keep on observing the named pairs > on top I look at the German leading index DAX with shorting spikes going into levels between 9.800 - 10.050ies.
Michael Hewson, CMC Markets UK (@mhewson_CMC)
It's important to remember there is a huge difference between trading and investing. A common mistake long term investors make is adopting the same mindset for both.
Investing is more about the long term and a buy and hold mentality. When trading the mentality is totally different and more about price moves in the short term. When trading investors should take their investor hats off and adopt a much more rigorous risk management approach or they could find their trading capital disappear very quickly.
Justin Pulitzer (@JustinPulitzer)
I think the key to success in 2015 will be Tactical Trading. This means smaller size positions w/ shorter time frames...
Christopher Nagy, KOR Group (@ChristopherNagy)
Keep your eye on market structure changes which can and will impact trading & profitability.
What will you be watching in 2015? Why?
Robert M. Brinker, FixedIncomeAdvisor (@BobBrinker)
Look for fixed income securities trading at a discount to their net asset value. This provides you with some protection in the event interest rates move higher.
Michael Lamothe, ChartYourTrade (@MichaelGLamothe)
My advice for 2015 is the same as 2014 and before... The single most important thing that anyone participating in the market needs to learn how to do is to control risk.
Just like when we were kids going to see a movie in a movie theater, the first thing we were taught was to know where the exits are in case of an emergency. When entering a trade, the first thing we should know is where we plan to get out in case we're wrong.
Todd Sullivan, Rand Strategic Partners (@toddsullivan)
Howard Hughes Corp (NYSE: HHC).... large landholder in TX, NV, NYC, NJ, HI and MD. It has unprecedented assets it is developing and 2015 will be a watershed year in terms of NOI growth and development.
Anthony Alfidi, Alfidi Capital (@tonyalfidi)
I am watching REITs in hard asset sectors. I believe they will continue to generate cash during an inflationary scenario. I will study REITs in timberland, public storage, wireless telecom towers, and data centers especially closely. I plan to publish more commentary on Rayonier Inc. (NYSE: RYN) and Public Storage (NYSE: PSA) in 2015.
Andrew Keene, KeeneOnTheMarket (@KeeneOnMarket)
Google Inc (NASDAQ: GOOGL): This is one of my favorite stocks for a long through next year...Unlike Apple, Google has not seen a huge run higher into the end of the year and is by no means overbought.
Sunedison Inc (NYSE: SUNE): Solar stocks have come under fire over the past couple of months...Sunedison is down over 20 percent in the past three months and I believe it is hugely oversold at these levels.
I will be watching the marijuana sector and especially GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH), which could see its Sativex approved by the FDA.
Tobias Carlisle, Greenbackd (@Greenbackd)
Energy has been the sector most beaten up in 2014. It has yielded up a number of deeply undervalued companies and it's likely that it enjoys some rebound in 2015. My favorite companies are Adams Resources & Energy Inc (NYSE: AE), VAALCO Energy, Inc. (NYSE: EGY), Pacific Ethanol Inc (NASDAQ: PEIX), Statoil ASA (ADR) (NYSE: STO), VOC Energy Trust (NYSE: VOC), Gran Tierra Energy Inc. (NYSE: GTE), Petrobras Argentina SA ADR (NYSE: PZE), and PBF Energy Inc (NYSE: PBF), all of which are cheap on an acquirer's multiple basis.
Greg Harmon, Presidium Capital (@harmongreg)
I continue to like materials like Alcoa Inc (NYSE: AA), Century Aluminum Co (NASDAQ: CENX) and United States Steel Corporation (NYSE: X), and will look for beaten down banks like Citigroup Inc (NYSE: C) and Bank of America Corp (NYSE: BAC) to move up. Finally large cap old school tech companies like Intel Corporation (NASDAQ: INTC) and Microsoft Corporation (NASDAQ: MSFT) should continue to perform well.
Greg Michalowski, ForexLive.com (@gregmikeFX)
- Global bond yields remain low.
- USD stronger against the EUR and JPY.
- The GBPUSD trades in a 1.50-1.60 range.
- AUDUSD falls on the back of slower China growth/commodity demand.
- Stocks move higher on the back of more global stimulus.
- Tech remains the focus along with Drug/Bio-tech.
- Solar remains a macro play.
- The new Ford F150 is a success.
- Alcoa rises more as expectations are that more automobiles will be made with aluminum.
Nick Fenton, TickerTank (@nickfenton)
Focus on liquidity. There are too many liquid financial instruments out there to warrant trading anything illiquid. Do not let the idea of a huge return (which is likely improbable) in an illiquid name steer you away from focusing on liquidity.
As an Options Trader, I define liquidity by looking for Options with a bid/ask spread of 10 cents or less (I'll accept a little wider on underlying's priced above above 100). I also prefer volume of 500+ and open interest of 1000+ on the Options, but that is not as important to me as tight bid/ask spreads so I tend to be a little more lenient with volume & open interest parameters.
Establish your liquidity parameters and stick to them!
If we...look at the world from a cross asset class perspective we see the following: oil plunged 45 percent in 2014, high yield markets are in turmoil, European equities (not including the German Dax) are lagging, 10-year bonds continue to climb in price while the yield curve flattens.
Most of these things point to slowing economic growth, which has not yet been reflected in the US stock market.
Georges Ugeux, International Investment Banker (@ugeux)
I will focus on the evolution of France and Italy whose indebtedness, both in relative and absolute terms, continues to grow in a general recession environment. The risk of disruption of those countries is systemic since each has a debt above 2 trillion Euros each. The fall of one would immediately affect the other creating a global crisis and the collapse of European banks.
Stable technology companies Intel, Apple Inc. (NASDAQ: AAPL) and Microsoft will likely continue to make substantial gains in 2015. Solar sector stocks such as SunPower Corporation (NASDAQ: SPWR) and SunEdison also look very good in 2015. Technology is emphasized with Uranus transiting Aries. The planet has an 84 year orbit and during its passage through Aries brings new and novel approaches to energy, transportation, and communications.
Phillip Streible, RJO Futures (@pstreible)
I expect to see silver futures hold its recent low of $15 per ounce and make its way back up to $20 by the end of December 2015. The start of the rally will begin in the first week of the New Year when money managers and fund managers start to look at rebalancing their portfolios. Generally they reduce some of the markets that have become way ahead of themselves like the stock indices and add to those undervalued like silver.
Angie Maguire, Grain For Citizens LLC (@GoddessofGrain)
In commodities, specifically corn and soybeans I will be watching adjusted production estimates, both globally and domestically as well as moves in demand. Chinese demand, will be paramount for both commodities as we move through the year.
Mike Seery, Seery Futures (@seeryfutures)
Lower prices ahead while the S&P 500 hits all time highs again.
Chris Vermeulen, TheTechnicalTraders (@TheTechTraders)
I will be looking for a 20-30 percent correction in the S&P 500, and I expect the commodity iPath Bloomberg Sugar Subindex Total Return Sm Index ETN (NYSE: SGG) to bottom and start to head much higher. Expect gold, silver and miners to bottom then flat line for a few years...
Looking to 2015, I will be watching Crossroads Systems Inc (NASDAQ: CRDS) closely as their StrongBox tape library offering has started experiencing growth, coupled with their IP assets (both '972 and non-'972 portfolios). Further, I will be watching ICTV Brands Inc (OTC: ICTV)'s new product offerings and how DermaWand fairs internationally as well as in Rite Aid stores nationwide...
Ezra Rapoport, Flammarion Capital (@HFBondsTrader)
Rate on US 10 year debt to drop. US equities markets to rise.
Malte Kaub, Traders Leadership Council (@SE1_Trading)
We expect a continuation of the strong returns in global equities and poor performance in fixed income. We will look for over/under-performance in economic performance to calibrate this base case. We expect Oil to find a new, lower range, around $91 (Brent) vs. old 110/barrel average.
We are watching healthcare and technology sectors. We are using predictive analytics to find an edge in the market. Interest rates and economy in Europe are a few red flags that can prevent further rally into 2015.
Investors and traders need to keep an eye on the Russell 2000 as we head into 2015. The small-cap index has spent the entire year of 2014 trading sideways. This price action is similar to what occurred when the stock market peaked back in 2007. If the Russell can break above 1215, the bull should be in great shape for another leg higher. However, if the Russell never breaks 1215 that certainly means it must have went the other direction, and it wouldn't have went down by itself.
If the global economy is going to turn around, oil demand will have to pick up.
Offshore oil drillers have been blindsided by the fall in oil prices. I'll be watching these names closely in 2015, specifically Seadrill Ltd (NYSE: SDRL). Even if oil continues to fall, Seadrill offers an incredible dividend yield at 19.3 percent - cushioning the downside. If oil rallies, this oversold name should get a major boost.
Ophir Gottlieb, Capital Market Labs (@OphirGottlieb)
Banks in Europe are near crisis stage and QE will not help. The Euro will drop to the dollar and several nation states in the EU may fall into recession if not depression. Why? Non-performing Loans are exceptionally large, assets are shrinking, earnings are shrinking and debt-to-equity is high.
Oil inventories are growing at the year-end, which is very unusual. In fact, oil inventories are normally cut into year end. Supply is suffocating the market and oil prices in the $50 or even $30 range are possible.
Annie Logue, Author Of Day Trading For Dummies (@annielogue)
The overall economy will improve, helping the auto sector and most retailers, but Sears and Penney's are beyond help.
Chris Temple, The National Investor (@NatInvestor)
2015 may still be a bit premature for this, but we are approaching the point where the markets go from an attitude of "Oh, goodie--more free money!" to one of "Oh, my God...MORE free money!?" Inevitably, we are moving back toward an investment climate such as in the late 70's and early 80's, where stagflation for a while favored tangible assets rather than overpriced financial assets.
Nate Tobik, CompleteBankData.com (@oddballstocks)
American banks under $5 billion in assets, French small caps and Credit Agricole regional banks.
Anne-Marie Baiynd, The Trading Book (@AnneMarieTrades)
I'll be looking for charts to cycle towards momentum again once the first quarter gins as I anticipate the last quarter of 2014 will be largely sideways in formation. I suspect the charts will rotate into proper support below the broad channel and then likely lift again to resist the channel levels.
JD Singh, Vetr (@TheRealJDSingh)
We'll be watching the retail sector, in particular the discount retailers like Family Dollar Stores, Inc. (NYSE: FDO) and Target Corporation (NYSE: TGT). The Vetr community has a very bearish view of the Discount Retail Sector - giving it an average of 2.5 stars. We're very curious to see how this industry performs after the 2014 holiday season and into 2015.
Jim Tassoni, Durand Capital (@jtassoni)
I think heading into 2015 two very interesting areas are Energy and Metals. Both have been under a tremendous amount of pressure and there are some great opportunities in the stronger companies that have been thrown aside along with the rest of the sector. Within both sectors look for companies with strong competitive advantages that can weather continued sluggishness in the sector but will benefit when there is a turn in sentiment which is bound to happen.
Martha Stokes, TechniTrader (@TechniTrader)
The year 2015 is going to be an important year for the market which is heading into its 6th year of a Bull Market. Areas to watch are new technology industries, in particular displacement and disruptive technologies that will reshape societies and economies around the world. Another important area for the US which is currently leading new technology globally, is the healthcare industry.
Harlan Pyan, All About Trends (@AllAboutTrends)
How markets react AFTER we've had a correction and is trying to repair itself. What NEW leaders are going to emerge will be key.
One such name that does intrigue me is that of Mobileye NV (NYSE: MBLY).
...Ever see the cars in the movie I Robot? Well this is Sci Fi starting to come to life in a way. Think about it, who would have thought GPS would be standard in cars back 10-15 years ago. Now we are starting to cross the threshold of letting the car do the driving for you more and more?
As I post this the stock is in what looks to be a bottom of a cup chart formation that could use a bit of chart time while it builds a whole new base.
Incredibly the NASDAQ is now within striking distance of all time highs. This will no doubt garner huge media attention should it come to pass, but with a wide disparity in performance among asset classes and markets over the last year, it will remain as important as ever to identify those sectors with the strongest trends, and specifically the individual stocks leading them, rather than focusing too heavily on the indices generating the headlines.
In 2015, I will be paying close attention the media sector...I have highlighted several stocks in 2014 that I thought were winners in the sector going forward with AMC Networks Inc (NASDAQ: AMCX), Discovery Communications Inc. (NASDAQ: DISCA), Starz (NASDAQ: STRZA), and Crown Media Holdings, Inc (NASDAQ: CRWN) the ones I like best.
Peter Tchir (@tfmkts)
Oil. I believe low oil prices will hurt U.S. economy. The shale industry has provided good jobs directly and via Cap Ex.
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