Expect A Lift

Jim Caron, a managing director at Morgan Stanley Investment Management

“I believe inflation risk premia will return to the markets. This should provide upward lift for 30-year Treasury yields, possibly toward 3.75 percent. The markets may also be surprised by how slowly the Fed hikes rates in the face of what we think will be an improving economic climate."

Unicorns Will Have Their Moment—or Not

Alan Patricof, co-founder of Greycroft Partners

“I am concerned about the overexuberance in financing of startups. There are just too many at the moment, and there isn’t enough money to sustain them. I think inevitably we’re going to see more of these unicorns”—startups valued at more than $1 billion—“try the public market, and that will finally tell us whether they can support themselves. By the way, I don’t think there’s enough money around to sustain all of them. We’re going to find out which unicorns can make it."

The Search For Yield Will Intensify

Russ Koesterich, global chief investment strategist at BlackRock, the world’s largest money manager

“The Fed is going to be less important in 2016,” says Koesterich, who expects Janet Yellen & Co. to raise interest rates incrementally. He predicts global growth will stay sluggish, increasing the thirst for higher-yielding assets. Investors who have relied on high-coupon bonds they bought before the financial crisis are running out of those securities, he says—and there’s little to replace them that’s a slam dunk. “You won’t be able to find income without risk. Asset classes from [master limited partnerships] to high-yield bonds each have their own risks—and none of them are cheap. You’re going to have to have a multi-asset-class, diversified-yield play."

Get Energized

Barbara Byrne, vice chairman of investment banking at Barclays Capital

“We will begin to see a recovery in the prices of natural resources for largely—and critically important—political reasons. We’re beginning to see sovereign wealth funds decline—Norway, Saudi Arabia. I think we’ll see a reversal on that; countries will not be able to afford fluctuations in their reserves. We’ll probably move to a more stable oil price, which I would say is $60 per barrel. And I think energy assets that are investing in sustainability at the same time that they’re focusing on meeting the needs of the current demands will probably do well."