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Outlook 2014: Superpowers lead the way

How the economy and investments will perform in the year ahead. From the Mid-January 2014 issue of Investment Executive newspaper.

January 14, 2014

After a good year, European bargains

The Continent is still appealing, but portfolio managers caution that investors need to pick and choose, and that some countries still are struggling to extricate themselves from the debt crisis

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Inflation at bay for now

Excess capacity, combined with high unemployment, is keeping the CPI in check in the industrialized world. Europe, meanwhile, is flirting with deflation

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Japan takes a proactive stance

The government is confronting its long-standing deflation, with an aggressive tax policy and labour reform. Many portfolio managers are optimistic about the effects of the 2020 Olympics, predicting stock appreciation in some sectors

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Growing exports should help stocks

With stronger growth globally as well as here in Canada, fund portfolio managers are paying close attention to cyclical stocks, such as those in the consumer discretionary sector, and stocks with exposure beyond Canada's borders

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Tepid year expected for resources

Some fund portfolio managers are focusing on stock selection in this tough environment. However, commodity prices should start to improve in 2015 as growth in the global economy gains steam

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Regulatory reforms will begin to bite

Financial services firms and their regulators will be working to finalize and implement major regulatory reforms rule-makers also will be assessing the impact of recently implemented changes

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The strengthening U.S. dollar

Canadian investors can benefit from the anticipated rise of the U.S. dollar this year. But the picture is murky if your clients have exposure to European securities

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Emerging markets set to improve

Despite a subdued outlook, portfolio managers predict emerging markets will show improvement over last year. The challenge will be in picking stocks and sectors rather than country plays. A growing middle class remains a driving force

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