What to Invest in the Stock Market in 2015: Expert Tips

As the new year approaches, you are likely considering making new resolutions regarding the management of your financial investments, and you may find yourself wondering where to investing in the stock market in 2015 ?

I have been scanning the press over the past few weeks to identify emerging trends, and several insightful and interesting pieces of advice have emerged. While investment journals are not clairvoyant, one can logically discern which paths to follow—or at least which ones to avoid—when deciding where to invest in the stock market in 2015.

The current economic landscape at the beginning of 2015

The deflationary risk within the Eurozone remains a reality; however, looking back at the previous year, it is evident that the European Central Bank is delivering on its promises. As such, it will once again do everything within its power to maintain low interest rates and stimulate inflation. Consequently, no major risks are anticipated in Europe. Furthermore, corporate balance sheets have “cleansed” themselves; indeed, overly fragile companies have unfortunately closed or been acquired, while others have had the opportunity to rebuild their cash reserves. Europe therefore remains a promising avenue for stock market investments in 2015. Finally, the appreciation of the dollar against the euro presents a prime opportunity for our companies to boost exports and, in turn, drive growth.

The American economy appears to be consolidating its recovery, while Japan remains on “life support.” In China, however, the nation’s economy remains fragile despite a solid foundation (a resilient labor market, strong wage growth, and growth in the real estate market). Russia, on the other hand, seems to be an area to avoid for stock market investment in 2015 (the severe international political crises it has continuously faced have tarnished its image, and the oil crisis risks further crippling this already fragile economy).

Expert advice on stock market investments for 2015

Prioritizing actions over obligations

Indeed, in the current low-interest-rate environment, investing in the bond market offers little advantage for individual investors. Consequently, for stock market investing in 2015, the press recommends focusing on the equity market. Furthermore, the appreciation of the dollar has significant implications for American companies (reducing their earnings) but also brings positive consequences for European companies. As such, the press recommends investing in European markets for the coming year, with a particular emphasis on cyclical stocks and large-cap companies.

Regarding commodities for stock market investment in 2015

The oil crisis we are currently experiencing may be seen as a windfall by some. However, many analysts are forecasting a collapse in barrel prices in the coming months. From my perspective, I believe we are at a favorable entry point for a long-term investment; the strategy should be to take a position while maintaining liquidity to increase holdings should prices drop further.
On the other hand, falling gasoline prices will boost household purchasing power, thereby stimulating global consumption. Once again, the stars seem to be aligning for European equity markets; therefore, this is where you should focus your stock market investments in 2015.

For your 2015 stock market investments, keep an eye on household consumption

Once again, falling oil prices are expected to boost household purchasing power. It may be worth considering which companies are “booming” among individual consumers. Personally, I believe that new technologies (though valuations are very high, particularly in the US) could reach new heights over the coming year, especially if the current landscape remains unchanged through next Christmas. To invest effectively in the stock market in 2015, it will also be necessary to look toward the retail sector and perhaps even toward cyclical automotive stocks.

Investing in gold in 2015 appears ill-advised

The analyses here are somewhat more technical. To summarize, analysts are advising against investing in gold in 2015, simply because global banks are once again well-capitalized (gold is no longer truly viewed as a safe-haven asset). What is concerning international bankers is Asian debt (denominated in dollars) and the strengthening of the dollar, which creates the risk of being unable to repay loans. Therefore, there is little chance of seeing gold prices skyrocket in 2015.

My stock market investment strategy for 2015

Regarding my stock market investment strategy for 2015, I intend to maintain the same approach as before; you can, in fact, consult the PEA best returns. Specifically, this is a long-term strategy based on the dividend yields of the stocks I select. Here is the list of my investment criteria:

• A PER below 12 (this is the price at which you purchase your share)
• Increasing yields over the last 15 years (dividend aristocrats)
• A dividend yield of over 4%
• A company with strong growth prospects or a robust asset base
• A low debt ratio (financial leverage)
• Only French stocks (for now, and to minimize fees on my PEA)

The previous analysis reinforces my conviction that I will invest in the stock market in 2015 through my PEA, specifically focusing on the European equity market.

And what about you—what will your stock market investment strategy be for 2015?