2015 Financial Predictions and Results

Well, here we are…another year gone and new one begins.  Happy New Year friends.

For the last couple of years, just for kicks, I made some financial predictions by looking into my cloudy crystal ball. Here is a recap of what I thought would happen in 2015:

  • The Dow Jones Industrial Average will finish the year at 19,400.

It opened 2015 at 17,823.07.  It finished 2015 at 17,425.03, a losing year.  I wasn’t even close.

  • The S&P/TSX Composite will finish the year at 15,700.

It opened 2015 at 14,635.07.  It finished 2015 at 13,009.95, a loss of close to 11%.  Another total misfire.

  • Our Canadian Dollar will finish the year at $0.85 compared to the US Dollar, relatively flat for the year.

It opened 2015 at $0.848.  It finished 2015 at $0.7225.  Ouch.

The following Canadian companies will increase their dividend at least once in 2015:

  • TransCanada Pipelines (TRP)

In February, TRP increased their dividend by 8%.

  • Telus (T)

In May, T increased their dividend by over 10%.

  • Canadian Utilities (CU)

In January, CU raised their dividend by 10%.

  • TD Bank (TD)

Although the CEO expected a “tough” 2015, TD Bank decided to increase their dividend by almost 9% earlier this year.

  • Fortis (FTS)

Like clockwork, Fortis raised their dividend by 10% this fall.

In addition to my financial predictions I tracked the predictions of some financial gurus.  Here’s how they fared:

Edward Jones Canada

Stocks – The Jones forecast for 2015 is for mid-single-digit increases based on improved earnings growth in a growing economy.

Me – rather vague, not surprisingly, so I’ll take this as 5% Canadian equity returns to be measured by the ETF XIC that tracks the broad Canadian equity market.  From iShares website XIC total return as of December 31, 2015 was -6.39%.  Bad result Eddie Jones…

Bonds – The same Jones forecast expects bond returns in 2015 to be the mid to low single digits.

Me – I’ll take this as 3% Canadian bond returns to be measured by the ETF XBB that tracks a diversified selection of investment-grade Government of Canada, provincial, corporate and municipal bonds.  Good guesswork as XBB from the iShares website returned about 3.75% in 2015.

Douglas Porter, Chief Economist, BMO Capital Markets

U.S. (Federal Reserve) Interest Rates – “the Fed” will raise rates for the first time in more than nine years.

Me – Good call Mr. Porter, “the Fed” finally increased rates in December.

Wall Street Gurus

Below is a list of what Wall Street strategists predicted in 2015 for S&P 500 index:

RBC – 2,325

Wells Fargo – 2,222

BlackRock – 2,160

Goldman Sachs – 2,100

Me – The S&P finished 2015 at 2,043.94.

The summary you should take from 2015 (and likely most years when it comes to investing):

  • Canadian companies that have decades of dividend history behind them are likely to keep paying dividends and may increase their dividends in any given year.
  • Nobody can predict the financial future of the stock market with any accuracy, not even the financial gurus.

Did you make any financial predictions for 2015?  Any predictions for 2016?

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16 Responses to "2015 Financial Predictions and Results"

  1. Future predictions may or may not be fun, but depending upon your investment strategy and they may or may not be important. Personally I no longer try or care, other than to monitor Dividends and Dividend Increases. No doubt the companies listed should increase their dividend and 10% would be great, but I would not be disappointed if overall the increases were only 5%.

    I’ll predict that all seven will increase their dividend and possibly all eleven companies I mentioned in my earlier post.

    Reply
    1. Predictions are entertainment for me. I learned a long time ago that I cannot predict the markets with any accuracy. The gurus can’t either 🙂

      As for the dividend payers there are never guarantees as you know but I feel the odds are in my favour with decades, sometimes generations of history repeating with many Canadian blue-chip companies. I treat dividend increases as a bonus. Whether the cash flow comes from a set of companies I own or via a distribution from an ETF I own, that’s a good thing in my book!

      Reply
  2. I’ve never made predictions. I know I’d be lousy at it so I don’t even try. It’s only been since reading this blog that I’ve even tracked the total annual income of the five portfolios. Kinda surprised myself how much was being generated when DRIPs and cash payments were added up. One thing that quickly became apparent was that with each DRIP, income rises. Especially the monthly ones. Of course I knew this but seeing the actual numbers reinforces the plan. Increases in the actual dividend of course accelerated the rise. I’m leery of falling into the trap of thinking that this income will never subside. One or two dividend cuts could easily happen. Furthermore, the annual payments from the ETFs fluctuates so one has to be careful with using past performance to forecast future income. All in all we did well this year. RRSPs are up 9.47 and 8.47 (little exposure to oil & gas). I don’t track the TFSA growth, I’m not sure why. Maybe I should start. Anyways, good luck to all.

    Reply
    1. I don’the mind predictions, it’s just for fun. I think people (experts) take this stuff far too seriously but I suppose they need to given their livelihood depends on them being right 😉

      As for the DRIPS, I feel the same. Seeing my monthly income increase is a great motivator to stay invested, continue to own the companies and ETFS I do, and simply stay the course. With DRIPing, investing is about as fun as watching the laundry tumble.

      Happy New Year Lloyd, best wishes.

      Reply
  3. As the others, and yourself, I don’t take predictions seriously.
    For my part I predict (or more, I hope) that 2016 will be a bargain year, the vulture in me can feel it 😀

    Cheers and happy NY Mark.

    Reply

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