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What I See Coming in 2014

Monday, 30 Dec 2013 06:39 AM

By Sean Hyman

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Next year will be a very different year than 2013 was. Many people are expecting some sort of follow-through of the same things they saw this year. I see it differently.

The world has been licking its wounds for around six years now. And during the last couple of years, the world has put much of its money to work in very few places. Fortunately for us, one of those places was the U.S. stock market, since Europe had been in a tailspin, China was slowing down and the emerging markets had massive outflows of money.

However, in 2014, I don't think we'll be the only game in town like we've been in the past. In fact, while I think U.S. markets could do okay, I believe that Europe, Asia and the emerging markets will finally fare much better.

China, while still experiencing bumps the road, is still seeing its growth pick back up. And as far as Europe is concerned, Germany has seen notable economic improvements and it's sure shown up lately in their currency, the euro.

So as long as China can "nip in the bud" their liquidity issues that they're experiencing right now, then I see them continuing to help pull the rest of the world along, especially much of Asia, Australia, etc.

And now that U.S. markets are getting to loftier price-earnings (P/E) ratios relative to much of the rest of the world, I believe we'll see some of the savvier institutional money roll out of many U.S. stocks and into European and Asian stocks, which trade at far lower P/E ratios.

Then, as long as these markets hold up well, I believe we'll also see money tiptoe back into the emerging markets. The emerging markets have suffered net outflows of money for a couple of years now and I think that begins to all change in 2014. That's going to help the stock markets in these emerging markets and their currencies will finally stabilize too, as the fresh money inflows begin once again.

So the good news is that the global economy appears to be on the mend and we're seeing it in improving GDP growth numbers, which track how fast economies are growing, and also in global manufacturing purchasing manufacturers' index numbers, which show the pick-up in manufacturing all over the world.

The bad part is that it's going to drive up costs for commodities during 2014. So if you're strictly a consumer of products, then this may not be such welcome news. But if you're not only a consumer, but you also invest in commodity stocks like steel companies, copper miners, oil and gasoline refiners, natural gas stocks, then you'll be pleased.

Also, so far, the dollar continues to break down. It broke a two-year uptrend line and has held below that uptrend line for months now. If that continues to hold (and I believe it will), then that will play its own part in kicking up fresh inflation, as the dollar is further diluted and commodities rise.

But just off of the increasing economic growth rates that I'm seeing all around the world, I expect to see 2014 being a bullish year for oil and oil companies.

Yes, over the last year or two, we've gotten a bit of a break through lower fuel costs, but I believe those costs will rise all throughout 2014, as more countries are seeing their economic growth pick back up, which will place a larger demand upon the supplies of fuel all over the world.

Again, if you're only a consumer of gasoline, that's not good news. But if you're a shareholder in oil companies, then it is good news to you.

So if you want to preserve and grow your wealth in 2014, invest in energy stocks like oil and natural gas companies. If you don't know which ones to get into, come follow me in the Ultimate Wealth Report and I'll show you which ones I've got my 108,000 subscribers focused on.

In addition to this, check out copper and copper stocks. I'd suggest only messing with the very largest and most fundamentally sound companies. Again, follow me in Ultimate Wealth Report if you'd like to know which one I like the best.

In other words, in 2014, make broad-based investments in things that will do well as the global economy continues to gradually improve.

Have a great 2014. Plan to have a good year. Be strategic. A well-planned year is a productive year and a happy year. Make it happen.

God bless!

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust.
Click Here to read more of his articles. He is also the editor of Ultimate Wealth Report. Discover more by Clicking Here Now.

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