Clues and commentaries on the global prospects for stocks, bonds and alternatives.
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Sam Peters Market Commentary
ClearBridge | January 21,2015

Sam Peters discusses oil prices, interest rates and his outlook for 2015

  • With the necessary caveat that what has occurred often gets treated as inevitable in hindsight, we evaluate two major forecasts that either surprised many people or the majority got wrong in 2014—specifically, that oil prices would enjoy continued low volatility and that interest rates were likely to increase as the U.S. economic recovery plowed ahead.
  • What is critical to understand is that 2014 was NOT unusual in that two big forecasts got missed. Quite simply, knowing the future is impossible. That requires investors to value multiple different futures, specifically by assigning different probabilities to various cash flow scenarios and to spend an immense amount of time on allocation.
  • In providing context for 2015 returns we ask two critical questions: What do current equity valuations suggest for future expected returns and how likely is an economic contraction that would typically tip us into a negative return year?