Stimulus, zero interest rate policy, Ukraine, Russia, Ebola and ISIS — these are just some of the things that kept markets on edge last year.
The major U.S. markets spent most of 2014 gyrating between low-to-high single-digit gains, hitting all-time highs in December after a turbulent October. We also saw the historic end of the Federal Reserve’s controversial stimulus program (at least for now), leading to higher volatility and market uncertainty. While both China and Japan instituted their own stimulus programs during the year, the European Central bank continued to toy with the idea of stimulus of its own.
On a positive note for consumers, oil prices dropped more than 40 percent from the year’s high, dipping below $60 a barrel for the first time in five years. Consumers have cheered cheaper prices at the pump while large energy companies have begun to scale back on exploration and development projects until prices recover.
Despite rising volatility, clearTREND research produced by our firm in Appleton indicates weak, upward trends in small-, mid- and large-cap equities. Our U.S. Economic Health Index™ shows 56 percent of U.S. sectors are still expanding, a slight improvement compared to December, but still weaker than normal.
“At The Appleton Group, we believe that 2015 is all about stimulus. If the massive stimulus efforts continue this year, we believe that current market levels are appropriate,” says Mark Scheffler, senior portfolio manager and founder of the Appleton Group. “But if the stimulus package does end and interest rates begin to normalize, look out below — stocks, bonds, commodities and real estate are all vulnerable to significant declines. So be watchful and use flexible investment strategies like ours to help you stay on the right side of the market.”
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