March 18, 2015
FROM THE EDITOR
by Nancy Zambell
Editor of Dividend Digest and Investment Digest
from Investment Digest, Issue 767
As I write this, the market futures are down today in anticipation of the Fed wrapping up its meeting, and potentially making an announcement that will portend rising rates by mid-year. It’s not as if a rate increase is unexpected, as market gurus have discussed almost nothing else for the last few months. However, the uncertainty is making both investors and advisors more cautious, as you’ll see in our Market Views as well as the change in our Advisor Sentiment Barometer.
Yet, the economy continues improving. Unemployment claims are down. And in the fourth quarter of 2014, 75% of the companies in the S&P 500 reported earnings above the mean estimate and 58% posted sales above the mean estimate. Analysts do expect the earnings growth numbers to soften somewhat this quarter, but the good news is that the S&P’s forward P/E estimate is 16.6, indicating a market that continues to have room to grow.
As for rising rates, while an announcement will probably prompt a quick—but temporary—decline in the markets, in general, the impact will be short-lived, barring any economic or global catastrophes. Long-term, of course, if rates rise precipitously, the scenario will change.
But in the meantime, the economy is recovering very nicely, and as long as that continues, that growth should boost stock market returns. And as I always say, with volatility comes opportunity, and any temporary down days in the market are occasions to buy at a discount—which our contributors love!
This month, we lead off with our Spotlight Stock, a leader in wireless charging technology. I explore this rapidly growing technology a bit further in my Feature.
Additionally, our contributors discovered five more tech companies with huge growth potential in infrastructure, semiconductors, cloud, content management and business processing. With lower energy prices still weighing on that market, we offer two energy-related stocks with fast growth trajectories.
In the medical sector, you’ll find a variety of biotechs, as well as two larger device and pharmaceutical businesses. And our Growth and Growth & Value sections feature a wide range of investments, including residential and commercial services, entertainment, restaurant, retail, banking and automotive companies.
Our Funds & ETFs this month are comprised of a couple of broad indexes, as well as a number of more specialized sector offerings.