Tags: Schwab | Liz Ann Sonders | 2015 | Investors

Schwab's Liz Ann Sonders: 2015 Looks Good for Investors, Even Ignoring Numerology

By    |   Friday, 19 December 2014 03:23 PM

Liz Ann Sonders, chief investment strategist at Charles Schwab, predicts 2015 will be an up year for investors — but thanks in part to an inflation scare, it might not be a bed of roses.

Sonders said that if upticks in wages and housing prices start to percolate, fears of rising prices could arise as well.

“We’re seeing vacancies in the rental market, so if you get the wage component and the high percentage of inflation numbers that are associated with housing, you could start to see that kick into some concerns,” she told Yahoo Finance.

Sonders said those kinds of worries could lead to more ups and downs for equities in 2015, but she doubts inflation will actually emerge as a meaningful problem.

“We’re in the middle more mature phase of what I think is a secular bull market,” she said.

“The returns will become a little more muted, we’ll see more bouts of volatility and more likelihood of pullbacks, largely because of where we are in the cycle.”

“As good as a melt up would feel, a grind higher like we saw in October likely would elongate the bull market and would ultimately be healthy.”

On a light note, Sonders said she looked at historical data and found that the year after a midterm election tends to be strong, as do years that end in a five — preconditions that 2015 will meet.

“Every year ending in a ‘5’, going back to 1905 has seen the stock market go up, and up a lot — an average of about 32 percent” said Sonders.

But she added, “This is a fun fact, not a forecast.”

Business Insider reported
that Wall Street pro Tom Lee believes it could pay off to be a contrarian in the face of middling forecasts from many analysts for next year.

"Investors are expecting 2015 to be a low-return year and are focusing on deflation and Fed tightening," he said.

However, Lee, the former chief US equity strategist for JPMorgan and current head of Fundstrat Global Advisors, forecasts the S&P 500 will reach 2,325 by the end of 2015 — about 14 percent above Friday’s mid-day levels.

Business Insider reported other 2015 forecasts for the S&P 500 range from a low of 2,100 all from Credit Suisse’s Andrew Garthwaite, Goldman Sachs’ David Kostin and Barclays’ Jonathan Glionna, to loftier levels of 2,275 from Morgan Stanley’s Adam Parker, 2,311 from Oppenheimer’s John Stoltzfus and 2,325 from RBC’s Jonathan Golub.

For 2014, MarketWatch reported that the best performing S&P stock sectors so far have been utilities, healthcare and information technology, with energy stocks not surprisingly representing the weakest sector.

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Liz Ann Sonders, chief investment strategist at Charles Schwab, predicts 2015 will be an up year for investors -- but thanks in part to an inflation scare, it might not be a bed of roses.
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2014-23-19
Friday, 19 December 2014 03:23 PM
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