After a quite good year in the financial markets, with good figures and profits, the question emerges: what about next year? Will it be better, worse or as good as 2013? Analysts are quite optimistic in their forecasts for 2014.
First of all, the mood is mainly bullish for next year. Market consensus agrees about double-digit returns in the stock exchanges. It is considered that US economy will grow, the monetary policy will remain expansive (despite the possible Fed tapering) and the interest rates will be still low.
The statistics help also this optimistic mood. A good year is followed by another upwards, so the studies. Since 1945, S&P 500 recorded an average 10% up after a year with 20% increase (in the most of the cases, not ever).
When we look at the different assets, equities are expected to provide the highest return, following a survey amongst investment professionals. 71% bet for them, against 4% for bonds and 10% for commodities. What products refer, ETF will also receive a push up, as another survey announced already in October. At least, 50% of investors planned to increase their ETF exposure in 2014 and 46% wanted to learn more about them from their advisors for next year.
However, there are also risks and fears for analysts. The uncertainty about the tapering (mainly, how deep it will be) is still a shadow for the investors. That is the concern for 68% of the CFA Institute members, for instance. The Fed meeting this week will possibly bring more light about this point. Political instability is also a problem. And it emerges a perception of financial bubble again, but with disagreement amongst the overvalued asset.
To sum up, there is a bullish spirit for 2014 in the air. After these long years of financial crisis, banking resize and unordinary monetary policies, the investors keep on the mood that has inspired 2013, with high returns and profits, and expect a good year in the stock markets.