2015: A Tough Year for Most Equities

We had anticipated that 2015 would be a volatile year for the equity markets. After all, we had several years of significant gains and a variety of headwinds had started to appear, including a strong dollar, weak growth in emerging markets, and continued low oil prices. The popular headline indices finished the year in a mixed manner, with the NASDAQ up over 5%, the S&P 500 slightly down and the DJIA down a little over 2%. However, measures of the broader stock market displayed much weaker performance, with indices such as the Russell 2000, NYSE Composite and the Valueline Geometric Index being down 5.7%, 6.4%, and 11.2% respectively. The few strong stocks of the year were popular, growth oriented names, such as Facebook, Amazon, Netflix, Tesla and Google. It is worth noting that even many bonds funds had a tough time making money during the year.

What does this mean? All in all, 2015 was a tough year for equity investments, with the vast majority of stocks ending the year in solid negative territory. This does not necessarily mean that we are in for more declines in 2016, as we are confident that the economy will stay on a muted growth track and some of the more value oriented parts of the market appear cheap and should attract significant attention from investors looking for bargains.