Steve and I recently had the opportunity to attend the 2015 Economic Forecast presentation sponsored by the Bradenton Area Economic Development Council featuring Dr. Hank Fishkind. With over 30 years of experience in the field of economic analysis and forecasting, Dr. Fishkind is a well-regarded economist in the state of Florida. He does not spend a great deal of time filling his speeches with jargon. Instead, he dives right into the details about our economy, which is most important to us.
Dr. Fishkind discussed broad economic markets, but eventually narrowed down to Florida economics, giving us his opinion of what we, as Floridians, might expect in the upcoming year.
Tourism is expected to increase significantly due to the recent declines in oil & gas prices. On average, Americans are estimated to realize over $1,000 in savings this year compared to 2014 – if fuel prices remain this low, which he thinks they may. More discretionary income for each household means more trips out of the cold and into the sun: the Sunshine State, that is! This increase in tourism exposure for Florida is expected to boost real estate sales throughout 2015, as well as current property values.
Most Florida clients I speak to can reminisce about a family vacation to Florida, which over time, led to a rental property investment and eventually, a winter home purchase. “I just wandered into the real estate office, and next thing you know we were touring homes. We bought a house that weekend before we left.” Sound familiar? Next thing you know they are spending one month, then two, then three… and finally, twelve months a year here.
According to Dr. Fishkind, housing prices in other parts of the country have recovered quicker, which also bodes well for houses being sold “up north” (so they can move to Florida) and for new homes being built in Florida (See below – FL is 2nd from the left).
So, how does an overall positive outlook for Florida’s economy impact investors? Very well in 2015, according to Dr. Fishkind, for those that benefit from added tourism and housing in Florida. And for the U. S. stock market overall, Dr. Fishkind expects a great deal of volatility throughout 2015, but if investors can “stomach” the ebbs and flows, he does predict high, single-digit returns for the year. In 2016-2017, markets might finally begin to slow down.
We will be updating our model allocations for our clients’ investment accounts later this month after compiling all the data from our various research sources. It appears that while our economy is still doing well, very few assets look to be the “great value” they were over the past few years – all the more reason to keep portfolios diversified with high quality investments. If you have any questions about your portfolio as we head into 2015, please do not hesitate to give us a call.
Dr. Fishkind is not endorsed by or affiliated with LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Diversification does guarantee a profit or protect against a loss. Past performance is no guarantee of future results.