PARSIPPANY, N.J., Feb. 8, 2016 /PRNewswire/ -- Hennion & Walsh, a provider of investment services and an advocate for individual investors, today released their Market Outlook (link here) for Spring 2016. The latest report reveals that due to continuous market volatility and economic growth concerns, 2016 may end up looking a lot like 2015 by the end of the year but with a lot of twists and turns along the way. Of note, Hennion & Walsh still expects that the secular bull market in the U.S. to continue for at least one more year with low single digit returns expected again in 2016, similar to 2015.
Hennion & Walsh's research suggests that the volatility within the equities market that has taken place thus far in 2016 is likely to continue and potentially intensify this year, which could serve as a reminder to investors of the importance of asset allocation. Accordingly, investor appetite for allocations to international developed market stocks, specifically in Europe and Japan, are expected to remain attractive for the immediate-longer term.
"Though we expect the U.S. economy to remain relatively stable, 2016 could see some unique twists in the markets due to a gradually rising interest rate environment, the upcoming elections and the likely 'passing of the baton' from U.S. equities to international equities markets in terms of return potential," said Kevin Mahn, Chief Investment Officer at Hennion & Walsh Asset Management. "As the year unfolds, it remains critical for investors to globally diversify their portfolios and to consider areas of the market that historically have benefited from previous periods of gradual tightening while not discounting the growth, income and volatility dampening potential of certain fixed income asset classes, such as Municipal Bonds."
As Hennion & Walsh prepares for the first half of 2016, the research team has identified several factors that they believe will be critical to future market growth potential. These include: jobs and wages, housing, China and international economic growth and interest rates.
- Jobs and Wages: Despite minimal wage increases, improvement in unemployment and associated job creations paint a relatively strong picture for the U.S. In regards to the sustainability of this economic recovery, it remains critical that continued new job creations, as well as improvements in wages and labor force participation, take place within 2016.
- Housing: Trends in the housing market have been a significant component of the U.S. economic recovery to date and will continue to be one of the engines of future growth for the U.S. economy. While housing recovery trends weakened during the end of 2015, statistics support a positive outlook for the housing market over the short-intermediate term as the U.S. economy continues to stabilize.
- China and International Economic Growth: Despite the dramatic fall of the Chinese stock market in January and lingering concerns over the slowdown of the Chinese economy, stabilizing and growing developed market economies may be able to help minimize the impact of China's growth slowdown. The country's currency strategy and an increase in exports also will be vital in helping renew growth in its economy.
- Interest Rates: The initial interest rate hike in December 2015 marks the beginning of a period of what we believe will be a very protracted and gradual tightening. It is anticipated that the rising rate cycle led by the Federal Reserve will lead to a stronger U.S. dollar, while other central banks across the globe either cut or maintain lower interest rates until their own economic growth targets are hit.
"As market volatility is expected to continue, investors would be wise to consider looking beyond 'core' holdings in global equities and fixed income and considering adding 'satellite' allocations to areas such as REITs, energy and the U.S. dollar," added Mahn. "In regards to energy, we recommend considering non-traditional sources of energy that are not highly correlated to the price of oil as we expect a growing worldwide appetite for alternative, cleaner sources. As the year progresses, it will also be interesting to see when/if the stock market decouples from oil prices."
A full copy of Hennion & Walsh's latest Market Outlook can be downloaded here.
About Hennion & Walsh
Hennion & Walsh, a full service brokerage firm specializing in municipal bonds, was founded in 1990 by Richard Hennion and Bill Walsh. Their mission is to be the individual investor's fiercest and most passionate advocate. Investment guides, webinars, seminars and online content are just some of the ways they help investors become better informed and make better investment decisions. The firm has built its reputation on developing strong, mutually beneficial relationships designed to last a lifetime, serving over 18,000 clients with brokerage accounts and managed portfolios. They are committed to providing individual investors with the institutional-quality service and guidance they believe they are entitled to. Additional information on Hennion & Walsh is available at www.hennionandwalsh.com. Hennion & Walsh is a member of FINRA and SIPC.
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Kevin Mahn | http://www.profnetconnect.com/kevinmahn
SOURCE Hennion & Walsh