Central bank and economic divergence have been the underlying themes in my recent writings, and these are having, and will continue to have, significant influence on financial market direction. Going into 2015, how does that impact your investments, and where should you focus your attention? This is the focus of BlackRock’s 2015 Market Outlook, released today.

First, some background. These last few post-crisis years could be called the Age of Recovery: The Federal Reserve and other central banks have kept interest rates extraordinarily low to try to revive their economies. In doing so, they’ve helped stocks, but the low rates have made it much more difficult for investors in need of income. In addition, a period of unusually low rates has had the predictable effect of pushing up valuations in several asset classes as investors stretch for yield.

Now we are entering what we at BlackRock are calling the Age of Divergence: The U.S., U.K. and select emerging markets are getting stronger while other regions—including much of Europe—are still struggling. The result is that central banks are beginning to take different paths, with the Fed setting a course for higher interest rates and the European Central Bank and Bank of Japan doing the opposite.

What does this mean for you and your investment portfolio in the New Year?

One of the consequences of the diverging central bank actions is that it should lead to a stronger dollar. That has implications for the markets, such as downward pressure on both commodities and inflation.

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