What the Experts Predict for the Year Ahead, Following a Largely Disappointing 2015
With any New Year come a bevy of hopes and aspirations – as well as fears – as to what it will have in store for us, personally, professionally, and otherwise. This year, in particular, demonstrates these sentiments, as many hope for a stronger 2016 to follow the nearly flat year (at -0.7%) in the S&P 500 that 2015 brought, along with historically low returns that bucked historical trends and tendencies.
While 2015 was largely what some experts call a “running to stand still” market, and that in the past flat years have been followed by more robust ones, the recent flattening we have seen in the market across-the-board over the last several months is indicative of a number of mounting pressures in the system as a whole.
Many industry experts portend that 2016 will likely bring moments of extreme volatility, along with the potential for more pullbacks or corrections, and recommend that U.S. investors keep a cautious, neutral stance when it comes to equities going into the rest of this year as a result.
So what does this mean for you going forward this year?
Well, historical trend data shows that in the vast majority of cases, flat years have been succeeded by positive, double-digit returns, characterized by largely strong earnings. In 2015, however, corporate earnings growth rates were weak at best, and while experts predict that S&P 500 earnings rates will rise above negative levels in 2016, the ability of the year to emerge strong for U.S. stocks will still be weighed down by declines in commodity prices and dilution in overall strength of the dollar in global markets.
With stocks under pressure already, just over a week into the New Year, time will tell what the rest of 2016 will bring, Key factors of the performance seen in 2015 will be large-scale elements of determining what is to come, including Market Caps, P/E Growth and Ratios, Dividends, Momentum, and Impacts of FANG Stocks (Facebook, Amazon, Netflix, and Google), which were the only four stocks to experience growth on a cap-weighted basis on 2015’s S&P 500.
How can I best prepare myself for success and achievement of my financial goals in 2016?
Time will tell what will unfold, and while historical data is a helpful predictor of events to come, stock market wax and wane is chiefly determined by a host of larger market factors. Careful, expert planning, as well as an investment management expert with their finger on the pulse of the global market sector will ensure you are as prepared for the opportunities and changes to come this year.
Wishing you a happy and productive 2016!