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Outlook 2015: Pains and Gains

By  Elliott H. Gue
Issue No.55 . Jan. 7, 2015
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At the beginning of each year, we update our outlook for the economy and commodity prices for the year ahead. Although our forecast necessarily evolves over the course of the year based on economic data and corporate earnings reports, stepping back to take in the big picture helps to establish a basic roadmap and strategy.

Given the sea changes underway in global energy markets, this exercise is of particular importance as we head into 2015.

The plunge in global oil prices that occurred last fall reflects growing production and spare capacity in North America and slowing demand growth in emerging markets. Although investors shouldn’t rule out the potential for short-term bounces, the down-cycle in the energy patch will take at least six to 12 months to play out.

When the crude-oil market finds a new balance, investors will have a golden opportunity to pick up shares of high-quality energy companies at favorable valuations.

However, this epic buying opportunity has yet to arrive. Until then, investors must remain patient and focus on high-yielding names that pay sustainable dividends and growth stories that don’t hinge on commodity prices.

In this issue, we review our predictions for last year (see Looking into the Crystal Ball), roll out our predictions for 2015 and update our outlook for the stocks in our International Portfolio and International Coverage Universe.

Next Issue Date : Jan. 24, 2015View Past Issues

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    Experts

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Peter Staas

      Managing Editor: Capitalist Times and Energy & Income Advisor