So what kind of 2014 have you had? Well, as an investor, Ive had a torrid year. Many more of my shares have lost money than have made money.
After the tech crunch and the credit crunch, its difficult to think of a moniker to name the current bout of bearishness. We seem to be in the midst of a commodities crunch, where resources ranging from oil to iron ore and precious metals have been falling. But we also have a bear market in small caps something that has hit me particularly hard, because of my bets on a number of growth companies.
This year has been about avoiding losers, not picking winners
Then another theme of this year has been the fall of the supermarkets, with companies such as Tesco, Sainsbury and Morrisons taking a tumble. What about the blue chips that constitute the FTSE 100?
Well, these have also performed poorly, with the index down overall. But there hasnt been a consistent trend: some shares have risen, and many have fallen. Overall, this year has not been about picking winners, but sidestepping losers. Stockpickers have had a very difficult time of it, and it has been hard not be caught out.
How about 2015? There are several trends that I expect to continue. Im afraid resources companies will have no respite: oil and gasprices will remain low, so the share prices of companies such as BP, Shell, Petrofac and BG will continue to slide. Whats more, I think mining companies such as Rio Tinto and BHP Billitonwill fall as well. This is definitelya sector to avoid.
What about the supermarkets? They have endured a terrible year, but will they recover in the next 12 months? I am not convinced. I fear that it will take several years to turn around these retail giants. This is another sector to avoid.
Buy telecoms, banks, housebuilders and China
On a more positive note, tech, telecoms and broadcasting have been progressing well, and this is an area to invest in: I am hopefulthatthe sharesof ARM, BT and Vodafonewill rise next year.
Another sector that Ithinkwillprogress, as the economy continues its recovery,is the banks: they have had a disappointing 2014, but next year businesses such as Barclays, Lloyds andRoyal Bank of Scotland are likely to move ahead. Likewise,I expect the housebuilders to have a positive year, with the housing market further strengthening.
What of small caps and growth companies? Well, the current bear market has thrown up some astonishing bargains. But this is a sector where investors will need to bepatient. This might be a year totuck awaya few cheap growth shares, but small caps are unlikely to push ahead until 2016.
Then there are emerging markets.I expectcountries dependent upon oil and iron ore, such as Russia and Brazil,to struggle. In contrast, no one seems to havenoticedthat China was one of the best performing markets this year. Ithink it willmake further gains next year.
So these are my predictions; but let me emphasise, these are only predictions. Somehow reality, and events, alwayshas a habit ofgetting in the way. See you in 12 months time.
Some might say making predictions is a mug’s game, but it is fun totry andseeinto the future. What’s more, looking aheadis part and parcel of investing.
Our experts have triedpredicting which shares will be winners when you retire. And they have written a report about what they have found.
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Prabhat Sakya owns shares in Vodafone, Barclays, Lloyds, Royal Bank of Scotland and Fidelity China Special Situations. The Motley Fool UK has recommended shares in ARM Holdings and owns shares in Tesco and Petrofac. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.