As we look back on 2014, it is hard to say that it has been anything but boring. The economy started out the year in a significant slump as exceptionally cold winter weather ripped through much of the Midwest and North East. Volatility returned to the financial markets as the Federal Reserve ended their latest QE program with two plunges and sharp reversals while oil prices collapsed by 50%. Geopolitical tensions rose in Russia and the Mideast, while midterm elections in the U.S. changed the Congressional majority. Yet, with all of the headwinds that faced the financial markets this past year, there was little that seemed to faze exuberant investors.
Unless something goes horribly wrong over the next two trading days, the markets will close the year with a gain of 13% or more. As I pointed out previously, such returns following a year with returns of 30% or more is not uncommon which precedes lower return years going forward.
However, while returns are lower going forward, and marked by clusters of negative return years, it does not necessarily mean that 2015 will be negative. As I just recently penned in “What Does Cycle Analysis Suggest:”
“While the odds of a positive year in 2015 are favorable, one should not dismiss the potential for a decline. The real economy is not supportive of asset prices at current levels, and further elevations in prices increase the potential for a future market dislocation.“
Will 2015 be the seventh (7th) consecutive year of the current bull market cycle? It is possible. But with 100% of all analysts and economists betting on that outcome, it is quite possible that something else will happen.
However, as we await the big ball to drop in Times Square marking the official close to 2014, let’s take a look back at the 10-most read posting of 2014. I hope that you will read them, or read them again, as many provide a contra-perspective to the mainstream bias.
#10) Ten Legendary Investment Rules From Legendary Investors
#9) Survey Explains Why Investors Remain Sidelined
#8) For 90% Of Americans There Has Been No Recovery
#7) Shiller’s CAPE P/E – Is It Really Just B.S.
#6) The Great American Economic Growth Myth
#5) 10 Warning Signs Of Stock Market Exuberance
#4) Economists Stunned By Housing Fade, Told You So
#3) It’s Only Like This, Until It’s Like That
Honorable Mention:
“I hope that in this year to come, you make mistakes.
Because if you are making mistakes, then you are making new things, trying new things, learning, living, pushing yourself, changing yourself, changing your world. You’re doing things you’ve never done before, and more importantly, you’re doing something.
So that’s my wish for you, and all of us, and my wish for myself. Make New Mistakes. Make glorious, amazing mistakes. Make mistakes nobody’s ever made before. Don’t freeze, don’t stop, don’t worry that it isn’t good enough, or it isn’t perfect, whatever it is: art, or love, or work or family or life.
Whatever it is you’re scared of doing, Do it.
Make your mistakes, next year and forever.”― Neil Gaiman
Happy New Year
Lance Roberts
