Download Newsletter December 2014 - Danielson Financial Group

YOUR FINANCIAL FUTURE
Insight into the Current Economic Climate and Ongoing Market Events
December 2014
Client Letter: "Outlook 2015: In Transit" | December 2014
Dear Valued Investor,
Looking ahead to 2015, I see a year that will be marked by transitions. Likely changes in monetary
policy around the world, the return of volatility, and the recent shift in the political balance of
Congress could mean 2015 is a year that will have the global economy, markets, and central banks all
on the move.
LPL Financial Research has identified significant elements that will be in transit in 2015, which
include:
I hope this educational
resource proves helpful. I
believe an educated investor
is a better investor. Please
call me if you have
questions.
Deborah Danielson CFP®,
CFS®, MSFS
Danielson Financial Group
President/Owner
3027 E Warm Springs Rd.
Suite 100
Las Vegas, NV 89120
702-734-7000
Fax: 702-307-7450
Deborah@DanielsonFinanci
alGroup.com
http://DanielsonFinancia
lGroup.com
The U.S. economy continues its transition from the slow gross domestic product
(GDP) growth of 2011-2013 to more sustained, broad-based growth. Ongoing
progress in the labor market, an uptick in wage growth, and continued improvement in
consumer and business spending have propelled an uptrend in U.S. economic output. LPL
Research expects that inflation--which has historically accelerated as the economy moves
into the second half of the business cycle--is poised to continue proceeding higher, but only
modestly so.
Central banks around the world will also be on the move in 2015. In the United
States, the economy is likely to continue to travel toward a point where the Federal Reserve
(Fed) will begin raising interest rates, albeit gradually, for the first time in nine years. The
Eurozone and Japan--the world's second and fourth largest economies, respectively--could
benefit, as central banks in those regions embark on more aggressive policy actions aimed at
restarting and reaccelerating their long-dormant economies.
Washington shifts from a relatively quiet 2014 to take a bigger role in 2015. The
Republican takeover in the Senate and approaching debt ceiling limit might provide the
opportunity for some movement out of the gridlock that has plagued Washington in recent
years.
Against this backdrop, LPL Research forecasts the following:
The U.S. economy is expected to expand at a rate of 3% or slightly higher in
2015. This forecast matches the average growth rate over the past 50 years, and is based on
contributions from consumer spending, business capital spending, and housing, which are
poised to advance at historically average or better growth rates in 2015.
Tempered by increasing levels of volatility, stocks may be poised to advance
5-9%. LPL Research expects continued economic growth, benign global monetary policy,
and a more favorable policy climate from Washington indicate that the powerful, nearly
six-year-old bull market should continue. This forecast is in-line with the average stock
market growth of 7-9%, since WWII. Supported by improved global economic growth and
stable profit margins in 2015, expected earnings per share growth for S&P 500 companies is
5-10%.
Expect flat bond market returns. With sustained improvement in economic growth,
slowly rising inflation, and the approach of the Fed's first interest rate hike, bond prices are
likely to decline in 2015. LPL Research believes high-yield bonds and bank loans with their
attractive yields can help investors manage this challenging bond market.
To help investors prepare for an expected market in transition, LPL Research has compiled timely
advice into its Outlook 2015: In Transit publication. Transition, as is described in this publication, is
just another word for change. The forthcoming change in the economic and market landscape in
2015 offers great opportunities, but also major challenges, likely in the form of increased volatility.
However, as LPL Research forecasts relatively strong economic growth unfolding over the horizon,
the bigger threat to most investment portfolios will be the pull of our emotions. It is human nature
to weigh market struggles substantially more than the strong market returns between them. As
investors, keeping our emotions in check when confronting increased volatility could be the key to
potential success in 2015. With an investment strategy in hand and a destination in mind, LPL
Research believes 2015 is poised to be a potentially favorable, though perhaps volatile, year for
investors.
As always, if you have questions, I encourage you to contact me.
*Please see the Outlook 2015: In Transit publication for insights on the economy, stock and bond
markets, and investments for the year ahead.
IMPORTANT DISCLOSURES
The opinions voiced in this material are for general information only and are not intended to
provide specific advice or recommendations for any individual security. To determine which
investment(s) may be appropriate for you, consult your financial advisor prior to investing. All
performance referenced is historical and is no guarantee of future results. Indexes are unmanaged
and cannot be invested into directly.
Economic forecasts set forth may not develop as predicted.
High-yield bonds are subject to higher interest rates, credit, and liquidity risks than those graded
BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will
decline as interest rates rise and bonds are subject to availability and change in price.
Stock investing involves risk including loss of principal.
This research material has been prepared by LPL Financial.
To the extent you are receiving investment advice from a separately registered independent
investment advisor, please note that LPL Financial is not an affiliate of and makes no
representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value
Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit
Tracking #1-334803 (Exp. 12/15)
The opinions voiced in this material are for general information only and are not intended to provide specific
advice or recommendations for any individual. To determine which investment(s) may be appropriate for
you, consult your financial advisor prior to investing. All performance referenced is historical and is no
guarantee of future results. All indices are unmanaged and cannot be invested into directly.
Deborah Danielson is a Registered Representative with and Securities offered through LPL Financial,
Member FINRA/SIPC