Last month, I made ten predictions heading into the new year, calling them ‘The Ten Surprises of 2015’. The definition of a surprise is an event which the average investor would only assign a one-in-three chance of happening, but which I believe is probable.

While I usually get five or six of the surprises more or less “right,” I don’t create the list to get a high score, but rather to stretch my thinking and that of my readers. Here, I explore these predictions in more detail.

The first surprise is that the Federal Reserve raises interest rates sooner than expected. Investors are broadly in agreement that the first increase in short-term interest rates will occur around midyear or later, but I believe we will see the Fed act sooner than that, probably in the first quarter. Many believe this is unlikely because Europe is near or in a recession and Japan is suffering as well. They reason that increased rates will only make the dollar stronger and hurt our trading partners. The lower-than-expected wage increase component of the December employment report is another reason for deferring a rate increase. My view is that the Fed is most responsive to domestic data: the US economy has been growing at 5 per cent real during the last two quarters, unemployment has dropped below 6 per cent and wages are starting to increase.

Cyber-terrorism has been in the news and the second surprise is that our luck runs out in protecting our major financial institutions from attack. Fear that our banks are vulnerable to cyberattacks would reverberate throughout the economy. This surprise is based on the view that the attackers are more able than the cybersecurity specialists protecting these institutions. We have already seen the havoc that can be wrought by cyberattacks with the Sony incident last Thanksgiving. This surprise suggests more serious trouble lies ahead.

In spite of rising short-term interest rates and cybersecurity issues, I still believe 2015 will be a good year for United States equities. This is the third surprise. I expect reasonable real growth of 3 per cent from the economy in spite of slowdowns elsewhere in the world. Revenues should expand 4 per cent and earnings 8 per cent because of share buy-backs, productivity, mergers and acquisitions and other factors. The European economy is the focus of the fourth surprise. European Central Bank chief Mario Draghi has been talking about implementing quantitative easing for some time and now he is finally going to do it. The surprise is that it has little impact and Europe remains on the brink of recession. There is some precedence for this in the US experience. The Federal Reserve expanded its balance sheet from $1 trillion in 2008 to $4 trillion in 2014 and the increase mainly pushed stock prices higher and kept interest rates low.

In the fifth surprise, I express similar concern about Japan. Shinzo Abe is determined to get the country back on a growth path and is prepared to step up the stimulus to accomplish this. He will suspend the second sales tax increase, which was scheduled for this year, and implement further measures. The surprise is that it doesn’t work and Japan remains in recession during 2015.

China is the subject of the sixth surprise. Looking at the economic statistics being reported by the country, the official growth rate has been stated at over 7 per cent, but credit expansion of 15 per cent to 20 per cent annually is required to achieve it. This amount of credit growth is unsustainable in my view, and the surprise is that China faces up to the fact that growth has slowed and announces it to the world. The new leadership commits to rebalancing the economy toward the consumer and away from investment spending on infrastructure and state-owned enterprises. The drop in the price of oil has significant geopolitical as well as economic implications, and this is the subject of the seventh surprise. I believe the decline in petroleum revenues will deepen Iran’s economic problems. For some time now, the people of Iran have been yearning for the sanctions to be lifted so they can benefit from the economic opportunities available elsewhere in the world. They see little in the nuclear weapons development program that would benefit the average Iranian.

The price of Brent slipping into the $40s would also have an important impact on the leadership of Russia. This is the eighth surprise. The economy there was suffering even before the sanctions were imposed and the price of oil collapsed. Conditions have worsened since then. The country is running out of foreign exchange reserves and a crisis may be approaching. I believe the situation is serious, and the people are losing confidence in Putin. If he agrees to comply with a twelve point program proposed four months ago, the sanctions could be lifted. At some point, Putin in his desperation complies, but he is humiliated in the process and resigns. Later on in the year, as demand from the developing world improves, the price of oil begins a steady climb back toward $70 for Brent.

I believe the sharp decline in oil prices has excessively upset the high yield market. Energy securities account for almost 20 per cent of high yield and their decline has had an impact on everything in this asset class, creating a buying opportunity. The buying opportunity in energy securities is the ninth surprise.

In the tenth and final surprise I argue that the Republicans will now realise that it would be better to prove to the American people that Republicans can improve life for them. They only lost the presidency by four points in 2012. If they could capture some portion of the Hispanic vote, which overwhelmingly supported Obama, their chance for victory would improve. Jeb Bush could help them accomplish this and he is likely to be the candidate.

This year I have four Also-Rans, which I didn’t believe had more than a 50 per cent chance of happening or I did not think were as important as the ten I picked. The first one is that water becomes the focus of environmentalists, moving air pollution to second place. Large parts of the United States experience droughts, diminishing agricultural production. In China and India literally hundreds of millions of people are without safe drinking water, making them susceptible to disease. Conflict over water rights becomes an important political issue in Asia.

The second Also Ran involves internet commerce. Commercial hotels and conventional taxi services didn’t complain about Airbnb and Uber when they were minor business irritants, but now that they are big global operations, pressure is increasing to make sure that each establishment and vehicle has the proper insurance and pays the appropriate fees and taxes. Making independent participants comply is difficult and this sector of stocks suffers a sharp correction.

In the third Also Ran, Brazil has a comeback. Dilma Rouseff becomes pro-business in order to improve the country’s growth and moves away from her socialist policies. The country has vast natural resources and a growing middle class, giving it considerable potential. Investors start accumulating Brazilian equities again. And finally, I suggest that Hillary Clinton, the Democratic front-runner candidate for President in 2016, bows out of the race. If Jeb Bush were the Republican candidate and attracts a reasonable number of Hispanic voters, and some liberals who are suspicious of Clinton’s ties to Wall Street and Hollywood don’t vote, the race could be very close. If she runs and wins, the difficulty of getting important legislation passed in a Republican Congress could also be exasperating and discourage her further. This combination of factors may cause her to withdraw, throwing the Democrats into frenetic confusion.

Now let’s see how the year turns out.