It’s cold. The year’s nearly over. The stock market analysts’ 2016 forecasts are coming in.
Here’s what your money situation might look like next year…
Heads up: Quality is making a big comeback.
At San Diego’s Investors Blueprint LIVE event last week, trading expert Michael Shulman shared his outlook for 2016.
While companies catering to aspirational buying are the next sweet spot, said Shulman, that doesn’t mean rushing to buy Rolls Royce or Bentley stock.
“For a lot of people, that’s going to Target instead of Wal-Mart,” he said.
Though PVH’s share price peaked about two years ago, Shulman said that stocks like this are good to pick up now, on the cheap, if you think like an investor and plan to hold on to a shares for five or more years.
Another that falls into this category is Ethan Allen Interiors (NYSE:ETH).
Though Ethan Allen hit a bumpy road recently with its board of directors’ struggle, it could be poised to capitalize on Shulman’s notion that, long term, it will see gains as Americans build post-recovery wealth.
The low-end luxury world is likely to explode for a variety of reasons, he said, and much of it is due to changing demographics.
Shulman’s other big takeaway is that millennials (those who came of age in the new millennium) and baby boomers will drive what companies will want to sell, from cars to tablets and clothing.
“Every day, millennials and boomers are changing the world, and it’s a big acceleration,” Shulman said. “It’s not a one off. It’s very important to know it’s accelerating.”
While baby boomers will need more healthcare, millennials will be looking at their next big tech purchase.
The companies that will cater to those consumers aren’t all the old standbys, either.
“Look for new names to trade; higher multiple stocks. You’ll see more in tech and healthcare,” Shulman said. “I love old names, but we need not be complacent.”
Regardless of the good news and opportunities, Shulman did have a few words of warning for stock pickers and investors heading into 2016:
As always, geopolitical factors will change how many companies react worldwide, and recent events will likely cause short-term volatility in the market.
Beyond that, many are looking at the Federal Reserve and whether it will raise rates at its December meeting. An interest rate hike could mean more people moving money to the bond market.
And we’ll have to wait until Republican Party primaries to know what kind of candidate will be picked.
Regardless, “Secretary Clinton is loved on Wall Street,” Shulman said.