It could be a fantastic year for investing, and some of my colleagues’ prognostications here at Investing Daily have gotten me excited about 2015, and a little fearful. While we’re focused on income, we also know a proper portfolio is a portfolio diversified by sector and geography, and that will help allay our fears.

In this issue we’ll provide a brief overview of sector predictions from fellow analysts, and then provide a preview of Global Income Edge’s new investment themes in advance of the Monday, Jan. 12 issue, which will highlight eight new stock picks.

Utilities: Another Year of Performance?

Our sister publication, Utility Forecaster, where I am a contributing editor, has had a bang up year. Utilities produced a stunning 33.1% total return in 2014, outperforming all other sectors in the S&P 500, while more than doubling the broad market’s return.

Many investors want to know if utilities will have the same performance in 2015. Certainly valuations have increased as a result of this sector being a fantastic place to deliver income and preserve wealth. My colleague, Chief Investment Strategist David Dittman, says that the utilities industry is well down the road toward long-term transformation, which will continue to benefit investors.

David wrote that utilities are making innovative moves around fuel prices, renewable energy, and electricity storage and energy efficiency. Further, he noted that these moves are helping to grow their businesses and to fend off new competitors. Many Global Income Edge readers will remember the publication’s focus on global utilities and telecoms last year, and how that enriched their portfolios.

We continue to believe that utilities will be a good place to earn income.

Oil & Gas: How Low Can Oil Go?

It was a rough year to be an oil and gas investor with the collapse in oil prices last year. In many ways the increased volatility in this market drew more utility investors: The utility sector advanced the most in the fourth quarter during the drop in oil and gas.

What happens in 2015 with oil prices will have huge implications for the recoveries in Asia and Europe, as well as the U.S. shale revolution.

My colleague Robert Rapier, chief investment strategist for the Energy Strategist, “sees a lot of uncertainty in energy markets at this point,” and too many changing variables. “If you look at some of the predictions others have made, that becomes obvious. I have seen people predicting $30 per barrel (bbl) oil and $100/bbl oil, and some suggesting that we would see both extremes. I have also seen people predict that oil production will decline in the U.S. after rising for six straight years,” Robert wrote.

Robert believes that low oil prices may linger into the summer and will distress many of the smaller, highly-leveraged producers. He also believes low natural gas prices may slowdown growth in renewables like wind and solar. His analysis suggests that consumer discretionary, consumer defensive investments will benefit during this period.

Global Income Edge last year withdrew from the oil and gas sector. We are refocusing the portfolio in the areas of healthcare, consumer staples and defensive stocks, which we discuss in more detail below.

High Volatility: A Year of Roller Coaster Markets

Personal Finance Chief Investment Strategist Jim Pearce asked the question that is on all of our minds: Where did all this volatility come from? “The cautious optimism of 2014 has been replaced by a skittish pessimism with an itchy trigger finger.”

Jim notes that this week has witnessed both extremes, with our stock market dropping almost 3% on Monday and Tuesday before recovering most of that loss on Wednesday and Thursday of this week.

He believes the volatility may be coming from the invisible but rapidly growing web of interconnected investment products controlled by currency traders, hedge funds, and institutional investors that dictate the short term direction of the financial markets. Though he wouldn’t call it a conspiracy, each of these investors is engaging in behavior they believe will yield the greatest risk-adjusted return for their clients.

Jim rightly suggests that investors will have to shut out the noise of the extreme volatility which only stokes fear and invites irrational decision making. Global Income Edge has designed a series of investments to provide more downside protection in 2015 for this very reason.

During period of high volatility the highest dividend yield may not always be the best dividend yield. Investors should consider a diversified portfolio and one that considers different parts of the risk spectrum and an individual investor’s needs.

Global Income Edge Preview

In our Jan. 12 issue we will be unveiling eight stock picks that are designed to preserve wealth and deliver income in the new investment environment outlined above. Some of these picks are aggressive and some of these picks are conservative.

In the Conservative Portfolio we are adding consumer defensive, consumer staples and healthcare investments. As noted before, many of you will find these to be extremely conservative, but given the volatility in the market I wanted to build in more blue chips that can withstand roller-coaster markets.

In the Aggressive Portfolio we like infrastructure development around the globe. There are various companies that stand to benefit greatly from the necessary replacement of aging infrastructure as well as the development of new infrastructure to meet growing populations. Further, with the GOP control of Congress, new trade agreements may boost growth in the Pacific Rim, and we are building out investments to take advantage.

All of the portfolio picks have also been strategically designed to benefit from the continued recovery in the U.S., and improving growth in Asia and Europe.

And expect Global Income Edge to add solid income investments in healthcare and real estate next month.