Stocks continue rally in the next year?
NEW YORK – Could index Dow Jones set an all-time next year?
This question might seem madness as early last year when fear and panic wrapped up the stock market and the Dow Jones industrial average plunged 6,547 March 9. Many investors thought it would be a decade or more to return to the registration of 14,165, set on 9 October 2007.
We can we now on the Board. Dow Jones index has soared 76 per cent the past 21 months and he would climb only 23% of nearly a record 11,492 Friday.
This is a big jump, but the Dow Jones index increased 23 percent or more than six times since 1985, or about once every four years. Two years, the Dow Jones index missed just with a 22.6% gain. Combine them and number eight years of 25, or about one in three.
Many analysts don't expect a gain of 23% in 2011, but they agree that the conditions are in place for the rally to continue.
"There are some really compelling reasons there say the Dow Jones index may address its peaks," says Randy Bateman, Huntington Asset Advisors investment Chief Director. "You have a scenario quite rose, where there is not much competition for stocks."
Business connections to ensure a decent income, but not the stock appreciation potential. Cash investments such as the Bank and the mutual fund money market, CD interest rates remain in the basement. Meanwhile, corporate profits continue to increase, making it the most attractive stocks. Businesses are also sitting on a record cash amount, giving them the flexibility to larger, dividends to buy their own stock or buy competitors.
The economy might help, too. The recession ended in June of last year, this economic expansion therefore only about 18 months. Expansion since world war lasted an average of five years. Dow Jones index take always the year recovery marked its second anniversary. But the last time as he did, in 2003, the Dow Jones index jumped 25 percent. This expansion has been intermittent so far. If it is finally gaining traction next year, stocks could do.
Dow Jones index has already had a good run this year. It is 10 percent in spite of persistent problems in the economy, including a 9.8% unemployment rate and a weak housing market. The reason is that the stocks investors focus more on what is in advance that what is happening today. They believe the economy will continue to heal the next business year will keep earning more money. Friday, investors received the latest sign that the economy is on the mend. Indicators of economic leader Conference Board index increased the month at the fastest pace since March.
History: Slow growth is not surprising to forecastersHere's a look at the way in which the Dow Jones index has jumped more than 23% six times the past 25 years:
-1985 A third consecutive year of strong economic growth - GDP grew by 4.1% - after a deep recession ended in November 1982 fueled a gain of 28% of the Dow Jones index. The inflation rate remained stable a fourth consecutive year, convince many investors the monster of the inflation of the late 1970s was killed.
-1989 Mergers and acquisitions, including redemptions by corporate raiders, has helped grow the index Dow Jones 27 per cent. Purchase Kohlberg Kravis Roberts & co. in the RJR Nabisco was the largest company that saw the country. In the month of August, the Dow Jones index has regained the level it had reached in August 1987, two months before the collapse of "Monday" this year black
-1995 Dow Jones index jumped 33 percent, as what would become the economic expansion the longest history of the US fed by its fifth year. And most Americans were putting money into stocks by accounts 401. The number of households having fried stocks to 41%, over 37% in 1992 and 32% in 1989, in accordance with the Federal Reserve.
-1996 Dow Jones index rose another 26% while the economy continued strong. Stocks gained as Federal Reserve Chairman Alan Greenspan asked in a speech delivered in December if "irrational exuberance is excessively is the net asset value."
-1999 Benefits large companies and excitement on the Internet has pushed the Dow Jones index up to 25 percent. Earnings per share for the companies of the S & P 500 index jumped 28%, the strongest growth since 1994.
-2003 Dow Jones index increased by 25% as economy enjoyed its second year of recovery after the recession of 2001. The Federal Reserve cut short-term interest rates as low as 1% percent for growth.
The two years that the Dow Jones index increased by 22.6% were 1986 and 1997. Each followed a strong years above that the strong economic conditions continued.
Many analysts expect will continue to increase the benefits of price with stock - and business - but not at a rate which would send the Dow Jones index passed 14 000 next year. Bank of America Merrill Lynch, for example, provides that earnings per share for large corporations standard & Poor 500 index increased 9% in 2011 and 6% in 2012. He sees the S & P close the increase of 13 percent in 2011 Friday.
History: Tax reductions clarify perspectives economic still dim"Nothing is impossible, but it is not true unlikely," says Bob Millen, the mutual fund portfolio Jensen Portfolio Manager.
Same Chorea Huntington Bateman, who says that the Dow Jones index could reach a record in 2011, warns stocks may not stay that high for a long time. Larger public deficits, he said, could lead lower stock prices in 2012 or in 2013.
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