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?