2016 is all-about the strong dollar, which is hampering results of companies which do business Internationally. I estimate F/X is zapping profits in multinationals by 15%. Priceline (PCLN) would have had 29% profit growth last qtr, instead had just 14%. 3M (MMM) would have had 9% profit growth, instead had just 4%.
Sector selection continues to loom large. Energy & Commodities lost 17% last year and Utilities fell 8%. Low energy prices & interest rates put more money in your pocket. Retail & Travel gained 8% in 2015, Healthcare 5%, Food & Necessities 4%, and Technology 4% as we spent more time and money on our phones and tablets.
What’s ahead for 2016? More of the same. You’ll pay more for Healthcare, do work, check your status, and shop online (having packages shipped to your door). You will continue to reap the benefits of low energy prices/interest rates by spending more on the things you enjoy. Here are my Top Ten Stocks for 2016.
