S&P 500 target: is 5250 in our sights? (this means a 1,000 point rise or 20%+ rise). GO GO GO!

 Well well well, here we go. The S&P 500 is up 14% this year, closing June at a record, while the Dow Jones Industrial Average has climbed 13%. This quarter will mark both indexes’ fifth consecutive quarter of gains, their longest such streak since a nine-quarter stretch that lasted through 2017.


Where to from here?  It appears that we can now set our sights on a 5250 target! This is thanks to our Italian friend Fibonnaci:

Why would this be the case?

  • there doesn't seem to be any irrational exuberance (or any real semblance of a consensus)
  • both growth and value stocks have done well this year which means that is not a major agreement about the future economic growth prospects
  • earnings will continue to motor ahead (thanks to low base levels from 2020)
  • consumer spending and cash on sidelines are at very high levels
  • yes, interest rates are poised to rise, but not anytime soon and even if they do rise they are still going to be at very low levels for some time to come
  • alternative investments aren't that attractive at the moment (i.e., housing, crypto, etc...)
  • volatility has been rather subdued, which means that we haven't had a major melt-up yet
  • inflation is a big questionmark. I think we are going to have higher levels for some time to come, but the market doesn't seem to believe this to be the case
Bottom line is this: Put your spare cash to work in a well balanced portfolio of stocks over the next few weeks/months ahead and you should be rewarded handsomely in the year or two ahead!




Comments

Post a Comment

Popular posts from this blog

18 lessons for my 18 year old son...

Image
Dear Misha, This day only happens once in a father's life, when your only son turns 18 and is now considered a fully fledged adult! After shedding a few tears and celebrating with some of his friends (and some adult ones) now was the time to celebrate as a little family unit. Now is a good time to impart 18 lessons (in no particular order) that I hope that you keep in your back pocket as you sets out on your own. Here they are (in no particular order): Use the worlds, "Please", "Thank You", "You're Welcome" early and often; Making mistakes is fine. Learn from them and move on (as a wise man said, "Excuses are the nails, used to build a house of failure"; Make eye contact when talking with others; Offer to lend a helping hand before being asked to do so; Take a public speaking class (or two) in college and practice doing so; Stay physically active, especially when you start feeling a bit down; If a problem arises, deal with it sooner rathe...
Read more

Importance to have a work buddy... Lessons from the trenches!

For the past 13 months we have been working from home. Over the past few weeks my school has dabbled with in person teaching and that has brought on its own set of challenges as well. But one constant throughout this whole ordeal has been the fact that I have had a core group of work friends who have helped bring some levity when things got rough and some perspective when things seemed to be spiraling out of control. Within my math department it's nice to have colleagues who are always there to help out and pick each other up when things seemed dazed and confused, first on the transition from in person teaching to remote and now on the re-entry to in person teaching albeit in a hybrid form. Adapting lessons and assignments from the "old school" paper format to the much more eco-friendly and XXIst century electronic format took some major teamwork. Figuring out the best way to utilize zoom and all of the bells and whistles that it offers also was a team effort. I am so gra...
Read more

20+ years of tennis ended today (goodbye Fed, Serena, Murray and Nadal)... It's the Djokovic show from here on in...

Image
  You read that right, a 6-0 set inflicted on Federer, the man who has won the most Wimbledon singles titles (of course the great Navratilova holds the all time record with 9 singles titles), and who has not lost here in straight sets since 2002. This simply marks the last domino to fall of the greats leaving the stage with a whimper, rather than a bang. Let's recap: Nadal didn't even play the tournament this year. He felt he needed more time to recuperate after a full clay court season and as such withdrew both from Wimbledon and the Olympics in order to "focus on looking at the mid and long term." Of course that is sensible, but with Djokovic one win away from his Major total, London being a short train ride away from Paris, this does strike me as a little strange. Not to mention that Novak beat him in Paris less than a month ago, it does seem that the Nadal challenge is slowly coming to an end; Andy Murray who is often described as a member of the big 4 in men'...
Read more