The dividend yield on the S&P 500 saved the index from posting its first negative year since 2008. Adding 2% in dividends to the slightly negative price action allowed the index to eke out a positive total return in 2015. However, the year was much tougher for investors than a relatively flat S&P would suggest.

Energy and materials companies dominated the list of worst performing stocks as the rout in oil and commodities prices intensified. Others in unrelated industries like Wynn Resorts (WYNN) and Keurig Green Mountain Coffee Roasters (GMCR) were also amongst the worst performers in the index – declining 64 and 61 percent respectively. Tons of high-quality companies collectively lost billions in market cap in what was a particularly difficult year to pick stocks. Wal-Mart, American Express, and Caterpillar all declined 23% or more in 2015, making them the worst performing components of the Dow Jones Industrial Average.

Last year was also a disappointing year for many of Peloton’s holdings. We spent much of the second half of 2015 diving deep into the fundamentals of our holdings, reaffirming our conviction on stocks that were caught in the broad selling. We are also continually sorting through the market wreckage for opportunities to buy good values.

Despite numerous positive effects of lower energy prices, markets fixated on the collapse in oil and implications for companies that suffer in its wake. A recent Peloton blog post by Steve Carr challenges the pessimism with a classic supply and demand argument. The gist? The best cure for low oil prices is low oil prices. There will be short-term carnage in the energy space – particularly over-leveraged producers and drillers – but their assets will be rationalized and the price will find a more sustainable equilibrium.

The fraction of the year not spent obsessed with oil was spent hypnotized by the Fed and the timing of its first rate hike. It finally came in December, and interestingly, the world did not end the next day. The Fed’s action indicates that voting members believe the economy remains strong enough to withstand a more normalized interest rate environment. They must also believe (at least right now) that the free-fall in oil prices is more a function of excess supply than a looming collapse in worldwide demand, triggered presumably by a significant slowdown or synchronized global recession. If they perceived the latter, it would have been virtually impossible for them to follow though with a rate hike no matter how premeditated.

What has become less certain is the path towards normalization in 2016. Markets were predicting four additional hikes this year. However, Chairman Yellen has been consistently telling markets that subsequent moves are not pre-programmed and may not occur in equally spaced, like-sized moves. We don’t see anything in the data to suggest a pause or reversal. In fact, the December employment report added more jobs than the average monthly gain for all of 2015.

The domestic data would have to soften materially for the Fed to put its normalization strategy on hold. The economy can handle higher rates. Low energy prices are good for many sectors of the economy, but stock prices are trading lockstep with generally falling oil prices right now. We think oil is in the process of bottoming and will stabilize or rebound in 2016 – and with it the broad stock indexes. 2015 was a difficult year but certainly not an indicator for the the start of a prolonged period of poor stock performance.