Speaking with Kash Pashootan, an Ottawa-area advisor who appears frequently on Business News Network, WP got a real eye-opener about what to expect from the markets in 2015.
The market correction earlier this year was approximately 10% yet hardly anyone remembers it. While investor complacency at the time momentarily got whacked upside the head, generally it doesn’t appear that investors are too worried about what lies ahead.
Pashootan feels otherwise.
The Raymond James advisor sees 2015 being a year of increased volatility and lower returns. Stocks, in his opinion, are fully valued having come through five years of bull markets and starting from a point at which they clearly dirt cheap.
Any bad news, Pashootan feels, will result in much bigger corrections than we’re accustomed to seeing in recent years. Risk, specifically how you interpret and manage it, will be the keys to successfully navigating what is quite likely going to be a tough year on the markets.
So, heading into the holiday season it’s important that advisors are acutely aware of what their clients are holding because quality is going to rule the day in 2015. Pashootan tends to look for companies that are consistently growing dividends providing clients with little in the way of drama.
If he had to pick one market – U.S. or Canada – in which to invest in 2015, he’d definitely go with our neighbours to the south where healthcare and technology stocks will continue to provide investment appreciation potential for investors while the same two sectors north of the border offer few if any opportunities.
Then, if you factor in that Canadian stocks could be in for a decade of poor performance after 15 years on easy street, it’s definitely not looking good in 2015. Add to this the combined effect of the big six banks seeing slower growth along with commodities hitting the skids and there’s really no way to sugar coat it – don’t put all your client’s eggs in the Canadian basket.
Down south, Pashootan likes regional banks in addition to technology and health care stocks. He feels they stick to meat-and-potatoes banking providing more reliable earnings than their much larger counterparts such as JPMorgan and Bank of America.
So, if you subscribe to Pashootan’s view that not much good is going to happen in 2015, especially in Canada, you might want to start massaging your clients expectations now before the you know what hits the fan come January.