There will likely be additional bumps in the road in the form of traditional stock corrections, interest rate volatility, commodity missteps and other unforeseen events. In order to weather those conditions, you will need a plan to step out of underperforming asset classes and hone in on areas showing the best overall relative strength.
2015 may well usher in a new era in the markets where things like risk management, trend following, and asset allocation are key to a successful outcome. Gains may be harder to come by, but there will still be opportunities for strategic investors to make well-planned decisions with their portfolio rather than leave things on auto-pilot and “hope for the best”.
For investors in fixed-income, taking a hard look at the overall structure of your holdings and how they perform under various credit and interest rate cycles will be critical for a successful outcome. A Fed rate hike and subsequent repositioning by portfolio managers in response to a flattening yield curve will be just some of the variables in play for 2015.
As always, having a disciplined investment approach and implementing it decisively will produce superior results.
This article is brought to you courtesy of David Fabian from FMD Capital Management.