For market/DJIA/Wall Street savvy Freepers, what is the consensus on the outlook for 2006?
Dare one use the "R" word here. Inverted yields are quite predictive in this respect.
Look for the Wall Street Journal to have its poll of a couple of hundred ecnomists within the next two weeks. Remember: 9 out of 10 years the consensus is wrong. The problem is, you don't know if they're too high or too low.
Keep in mind that even a "flat" market is not necessarily a bad thing, since the 2002-03 tax changes have prompted companies to distribute larger dividends.
Most all predictions are S&P up 11% minimum, DJ at 15000 before year end and overseas seeing records.
If you find out, you can safely take the opposite position.
Barring another 9/11, things should be quite good in 2006. The concerns about short term interest rates being higher than long term rates is bogus, and ignores the rest of our financial picture. We had an inverted yield curve (and a somewhat similar good economic position) prior to the long bull run of the Reagan-Clinton years. Inflation is tame, I'm pretty happy about where the dollar is, stocks are undervalued and CEO's are under-forcasting their projections...which are still pretty good.
The market will continue to go up and down, and do whatever its going to do. The key is not to try to predict, but rather to react without overeacting. If you are in the market for the long haul, then continue to dollar cost average into a well diversified porfolio consisting of no-load, low expense mutual funds while waiting for more favorable buying oppurtunities, which I would define as 1190 for the S & P 500 Index or around 9900 for the Dow. Also, do not buy gold as an investment for any reason, and stay away from real estate and REITS at current prices.