DIY Investor Magazine
/
2015 Issue
14
“In my view, the key drivers to the market going
into 2015 are profits growth, easy money and
investor scepticism.
A favourable backdrop for the US economy
should support profits growth for more
domestically-oriented small and mid-sized
companies; although interest rates should rise
at some point (we hope) the Fed is likely to lean
towards raising rates more slowly than expected
because of still rampant deflationary forces as
well as political pressure to help workers; and
finally notwithstanding a bounce in equities
towards the end of 2014, there is a long list of
investor concerns about stocks that may weigh
on markets in 2015, potentially creating some
good opportunities for us to pick up stocks at
lower prices.
I am particularly optimistic on the long term
prospects for the US compared to many major
economies. America is blessed with favourable
demographics and a wealth of resources but it
is easy to overlook the enormous improvement in
America’s competitive position in manufacturing
in the last decade.
America’s flexible work practices have helped
it achieve a significant cost advantage versus
European competitors and wage inflation in
China’s coastal cities has eroded China’s relative
advantage.
Although the benefits to growth from exploration
of oil sales are likely to be less than previously
expected in 2015 as a result of the sharp fall in
oil prices, the US consumer should receive a
short-term benefit from lower gasoline prices – a
significant benefit in a country that relies heavily
on the car and where gasoline taxes are low.
In summary the relatively bright long term outlook
for the US economy should benefit US small and
mid-sized companies, given their mostly domestic
exposure.”
THERE IS A LONG LIST OF INVESTOR
CONCERNS ABOUT STOCKS THAT MAY WEIGH
ON MARKETS IN 2015, POTENTIALLY CREATING
SOME GOOD OPPORTUNITIES FOR US TO PICK
UP STOCKS AT LOWER PRICES.
US – ROBERT SIDDLES, MANAGER OF THE JUPITER
SMALL AND MIDCAP COMPANIES FUND
