August, 2015 Archives

6
Aug

2015 Midyear Outlook – Some Assembly Required

by admin in Global Investments

2015

LPL Financial recently released their midyear economic and market outlook.  Their theme is that investors should pay close attention to portfolio construction going forward.  The economy has delivered six consecutive calendar years of positive returns for stocks since the end of the Great Recession.  However, constructing a strategy for the remainder of the economic expansion will require a tricky assembly.  Divergent monetary policies reveal an uneven global recovery that has triggered an uptick in stock market volatility.  A few important pieces requiring assembly for the remainder of 2015 include:

  • How the US economy pieces together the components needed to bounce back from its lackluster start of the year?
  • After successfully delivering the US economy out of the recessionary “warehouse,” how does the Federal reserve assemble an exit strategy from its six-year policy of zero interest rates?
  • Corporate earnings growth continues to search for that spark to ignite equity advances.

A key point made by the LPL Financial report is the importance of diversification.  Diversification detracted from market returns in 2014, but the beginning of 2015 witnessed the return of diversification benefits.  With volatility poised to rise in the second half of 2015, the potential benefits of diversification should hopefully continue to materialize.

The last point I want to highlight is LPL Research predicting another positive year in the US stock market as measured by the S&P 500 Index.  Their forecast range is 5-9%.

To read the entire report click here:  http://lpl-research.com/outlook/Midyear-Outlook-2015_Spread.pdf