The 32% gain for the S&P last year was a blessing and a curse for investors.

A blessing because it padded all of our portfolios.

A curse because the gains came far too easily, making 2014 a brutal environment by comparison.

Yes, the S&P is up on the year, but still many small caps and glamour growth stocks are in the red. Plus the volatility made it like a house of mirrors where you were never quite sure what to make of the investment landscape.

Now we get to put this miserable year behind us as we look ahead to 2015. And after much contemplation, here is my outlook…

It will be exactly like 2014.

(End of Commentary)

Oh…you wanted more? 😉

Yes, above is the final conclusion that next year will be far too similar to 2014 (modest gains and more volatility than you would like). But if you know that in advance, then it should make it easier to profitably navigate the waters.

In the rest of this article I will cover these topics to get you in the best position to prosper in the year ahead.

1) Why Still Bullish?
2) Predictions
3) Potential Pitfalls

Why Still Bullish?

A long term bull market stays in place until one of two things happens:

A) Recession looms on the horizon awakening the next bear

B) Valuations get stretched (Ex. The bear market that started in 2000)

So let's discuss each concept. As for a recession looming on the horizon, that just doesn't add up given how economic data continues to improve in the US. Truly the readings for manufacturing, service, retail and employment are at their healthiest levels since before the Great Recession. This explains why the average GDP reading the past two quarters is +4.2%.

I appreciate that on average there has been a recession every 5-6 years. But that is often because the boom times are too good, leading to excesses that bring to life the next contraction. The beauty of Muddle Through growth, seen in the first several years of this expansion, is that there are no excesses or bubbles at this time. So no fear of an imminent recession.