Millennials, Oil, China and More
from The Steve Pomeranz Show Hosted by Steve Pomeranz
with Paul J. Lim, Assistant Managing Editor at Time Money, Financial Columnist While 2014 was a great year, the jury is out on 2015. On the one hand, economic fundamentals are very solid in the U.S. with solid job creation, falling unemployment, a solid housing market and good GDP growth. Moreover, as millennials in the U.S. grow up over the next 15 years – a group that’s larger than Baby Boomers - we could see solid sustained GDP gains through household formation, college spending, retirement savings and greater consumer spending. On the other hand, economies in Europe, China and oil-producing nations are slowing down or taking a severe hit if they’re dependent on oil revenues. So 2015 will see definite winners and losers, as is typical when there are significant economic events such as a 50%+ drop in the price of crude. And every investor’s challenge is avoiding stocks that will lose out and buying stocks that stand to gain from this seismic shift. For example, for companies such as railroads, airlines and transportation, those serving the robust domestic economy, falling fuel prices is great news. But within that sector too, truckers, for example, may well do better than railroads because trucks are less fuel efficient and falling fuel prices could deliver greater savings. And looking outside the U.S., 2015 may be a good time to selectively ease-off on international investments – primarily due to falling oil and a slowdown in China which has a larger-than-life impact on other smaller economies.
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