While it can be worthwhile to look back to 2014 and the dismal performance of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which gained just 0.8% and assess how your portfolio performed in comparison to the index, now is also the time to look forward and implement your portfolio strategy for a strong performance in 2015.
In fact, if you own shares and you don’t have a strategy to outperform the index – you have a problem! That’s because the only reason it’s worth taking the risk of owning shares directly, instead of simply owning the index, is for the purpose of outperforming.
If you’re looking to outperform in 2015, the following five stocks could be a good place to start…
- Wesfarmers Ltd (ASX: WES) took advantage of buoyant capital markets last year to off-load a number of assets. With a cashed-up balance sheet and a portfolio of retail businesses including Coles which are firing on all cylinders, the conglomerate is well-positioned to not only ride out any market volatility in 2015 but importantly it is also well-positioned to pounce on any appealing acquisition opportunities.
- Ansell Limited (ASX: ANN) provides shareholders with exposure to overseas markets including Asia where growth rates are higher than Australia. At the same time, these overseas earnings provide an added benefit for shareholders when the cash is converted back into Australian dollars as a result of our weakening domestic currency.
- Santos Ltd (ASX: STO) share price fell by approximately 50% last year in response to the crumbling oil price. While jitters in the energy sector remain – the price per barrel has just slipped below US$50 – investors who take a long-term view could quite possibly look back in a few years’ time and be amazed that there was an opportunity to buy this leading oil and gas producer in the $7 range.
- BHP Billiton Limited (ASX: BHP) has, like Santos, been hit by falling commodity prices. Given BHP’s diversification and low cost producer status, it is one of the best placed miners to ride out the cycle. Much like Santos, investors who take a through-the-cycle view could also potentially look back in future years with bewilderment that BHP’s stock could be snapped up for less than $30 a share.
- Macquarie Group Ltd (ASX: MQG) provides investors with exposure to both the Australian and global financial services sector. Unlike the general banking sector which faces the prospect of increased regulation and potentially declining margins, Macquarie has plenty of future growth potential and upside ahead of it.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned.