Prepping Your Investment Portfolio for 2015

Taxes and Investments

January 2015GarzaHarris.com

With 2014 fully in the rear view mirror, it is time to look up the road and focus on the investing challenges ahead in 2015. Last year saw the last vestiges of the Great Recession and credit crisis; the Dow-Jones reach new heights while interest rates remained low. Volatile at times, 2014 will go down as a bull market, and many are predicting a similar climate of highs and lows for 2015.

How to navigate market will depend on a handful of key economic factors. Look out for these 5 trends as you prep your investment portfolio for the remainder of 2015.

With inflation remaining low in the United States, the Federal Re-serve will have some breathing room as we move into 2015. Interests rates have been held extremely low for the last 6 years but that is expected to change this year. A gradual increase will be a return to normalcy for investors who have feared that this extended period of low rates is unhealthy in the long term.

Expect the Fed to Raise Interest Rates

Stock Up OverseasIf you are looking for bargain stocks, you’ll be hard pressed to find them in the US market right now. Although your risk increases, in-vesting in foreign markets this year has the opportunity for greater return than keeping your money domestically. Look closely at Japan equities and commodities in emerging markets throughout Asia for value.

Stand StrongDo you own your stocks or are you just renting them? The volatility will most likely continue this year and it’s important for investors to resist the urge to cash out. Cash is susceptible to inflation and taxes leaving you in the red while your money could be put to work. Hold on tight and enjoy the ride.

Stocks Over BondsDespite its ups and downs, 2014 was a strong year for the stock mar-ket. Expect stock prices to grow well into 2015. Meanwhile, the bond market is expected to have lower returns based on the expected in-terest rate hike. Shorter-term bonds are likely to take the most direct hit from the rate change but long-term bonds will also be affected. Focus on cyclical stocks to ride the wave of the overall stock market.

Millenial Home BuyersAs Millenials come of age, they will begin to enter the market for a home. Struggles in the job market over the last 6 years and student loan debt have prevented many in this group from seriously consider becoming homeowners. With wages on the rise and a year of solid job growth, home prices--already back to or above pre-bubble levels--will continue to rise this year.