As the US economy finally begins to show signs of consistent growth following one of the longest and deepest recessions for many decades, a significant number of investors have chosen to sit on the sidelines, waiting to see what happens when the Federal Reserve eventually begins to raise interest rates. Precisely when this will be is open to debate, especially since inflation remains at or close to zero. Raising rates brings with it two key risks; the recovery could be stalled and negative inflation, deflation, becomes a real possibility. In either case, the stock market is likely to be spooked, threatening a correction that some forecast could be as much as 20%.
The first piece of advice, should you choose not to sit on the sidelines, leaving your cash in the bank, is to invest in top-tier companies operating in key sectors of the economy. The next, which is especially true if you are a novice, is to maximize your chances of success by contacting a specialist investment advice service such as Fortress Investment Group. Responsible for managing some $67bn of its client’s funds, this global enterprise offers a comprehensive range of financial services including asset based investing, operations management, corporate mergers and acquisitions and investment financing via the equity and debt markets. The company’s Co-Chairman Peter Briger has many years of experience in the sector, having spent 15 years at Goldman Sachs, where he was made a partner in 1996, before joining Fortress in 2002.
To help get you off the fence and back into investing here is a list of the ten most promising sectors for 2015.
Demand for energy has been depressed for the past several years, but with growth returning demand is set to rise. In addition, investment in alternative, ‘green’ forms of energy is also rising as the government attempts to meet its 2020 target for 20% of electricity production from renewable sources.
Utilities include the basic necessities; telephone, gas, electricity and water. While this is not the most dynamic investment sector, it is relatively stable and as the economy grows so will the price of utility stocks.
Healthcare includes hospitals, pharmaceutical companies and insurers. It performed outstandingly in 2014 and there is no reason to suppose 2015 will be any different.
Companies involved in every form of transportation, from railroads to airlines, are set to expand over the next year as the public start to feel the benefits of lower unemployment and higher wages.
Everyone has to eat and drink to survive, so this sector is relatively unaffected by economic downturns. This is a safe place to invest as long as you stay with the multi-nationals.
Unlike the consumer staples sector, this covers life’s little luxuries; entertainment, dining out and vacations. With the economy showing sustained signs of recovery, this is definitely a sector to watch.
Though somewhat riskier than other sectors, stocks in technology-based companies offer a better rate of return, but choose carefully.
The banking sector is at its best when interest rates are low, because this is when services such as mortgages and loans tend to be in high demand.
Defense spending is set to grow as all areas of the military invest in technologically advanced weapons systems to combat the rise in international terrorism and increased tensions within Eastern Europe.
The commercialization of space is just around the corner, so if you are prepared to invest now and wait for a while the rate of return could be massive.
No one can foresee what the next year will bring, but if you are careful and take advice from the professionals there is no reason why 2015 should not be a financial success for you.