By Peter Switzer

The year ahead is all about keeping the faith on what investing is about and not being too spooked by the unknown. As Franklin D. Roosevelt, the US president during the Great Depression, counseled back then: “The only limit to our realisation of tomorrow will be our doubts of today. Let us move forward with strong and active faith.

As this is my first investment observation for 2015 for www.switzer.com.au, it’s timely to look at where we’ve been in 2014 and where we’re likely to go in 2015.

While our returns for super should only be relevant on a financial year basis, because that’s when we pay tax, I know people do look at their calendar year performance. That’s where 2014 was disappointing.

The S&P/ASX 200 was up a mere 1.1% but if we add in a conservative 4% for dividends and say 1% or so for franking credits, the total return, which is the most important, was around 6%. That is miles better than term deposits — the best I could find was 3.5%. So being in stocks in 2014 was OK. By the way, we were up by 5.7% in the year to September but the last quarter was a nightmare.

Iron ore prices continued to slide on weaker than hoped China growth, though it was still over 7%. Then strong US economic data brought speculation that the Yanks would raise interest rates earlier than expected, which, combined with lower iron ore prices, sent the Oz dollar down, while the greenback went up.

This encouraged foreign investors in our stocks to get out until the dollar stabilised at lower levels. But the dollar and stock slide wasn’t helped when OPEC decided not to cut production as oil prices fell.

This non-move surprised market experts and the oil price dropped like a stone and so did the Oz dollar, as local energy companies were taken to the cleaners.

It was a perfect storm and took the Oz dollar from 92 US cents in September to the 80.8 US cents it is this morning! And over the past year our dollar was above 95 US cents!

Regular readers know I predicted the fall and even argued that any losses on my then upcoming New York trip last December would bring currency costs to my hip pocket via a lower dollar. I tipped I’d more than make that up with the eventual positive impact on stocks in my super fund.

And that’s what I expect to see happen this year.

The currency benefit will not only help companies that were hard hit by the strong Oz dollar for the past five years, the economy will grow more solidly as well. Then there’s this unbelievable drop in petrol prices, which will boost incomes — average household incomes are up $30 a month so far — and will drive down costs for business.

A lot of the stuff that hurt 2014 growth and stock prices — like falling oil prices and the slumping dollar — will help the economy and the stock market this year.

Just like a weaker than expected Europe, China and Japan didn’t help global growth and stock prices last year, the reverse is likely this year, as stimulus programs are in train for those regions in 2015.

CommSec thinks our stock market will end up between 5900 to 6200. I think that’s about right, though it could even be a bit stronger, if the Abbott Government can get its infrastructure programs happening quickly and its Budget dialogue with consumers and business more positive.

This long, slow, bull market, which is grinding higher isn’t in the death phase yet so it makes sense to remain long stocks, especially when interest rates look to be on hold for a long time.

I told my Switzer Super Report subscribers on Saturday morning that I’m betting on Australia in 2015, so even simply playing the ETF on the S&P/ASX 200 index could be a pretty simple and OK play for the year. If CommSec is right, it looks like a 14% return even before dividends and franking. I’d be happy with half of that!

To quote Roosevelt again: “The only thing to fear is fear itself.”