Skip to comments.One Bearís Gloomy Forecast: Stocks Down 20% in 2014
Posted on 01/03/2014 3:59:28 AM PST by Red in Blue PA
U.S. stocks cant go straight up forever. And if the end of QE1 and QE2 taught investors anything, the market could suffer a significant correction this year as the Federal Reserve starts dialing back its stimulus.
That view comes courtesy of Peter Boockvar, managing director and chief market analyst at the Lindsey Group, who on Thursday predicted the S&P 500 could drop 15% to 20% in 2014 and finish the year between 1550 and 1600.
The S&P 500 opened the year down 0.6% at 1837. The index surged 30% last year, its best performance since 1997.
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That is never a good thing.
Good grief! I don't know why. It's like skiing in an avalanche zone.
What I am doing now is putting aside money but keeping it in cash. When stocks are reasonably priced, then I will buy some.
At that time, Mr. Boockvar also incorrectly called for a mid-single-digit return. Now, he acknowledges how far out on a limb his call is in relation to what other strategists are predicting.
He was wrong last year -- why will he be right this year? (Yes, I understand why this is happening, but I can't understand why a Big Mac doesn't cost $300, yet.)
I was surprised at how far the markets went up last year too. One of the benefits of being fully invested is that one never has to guess, as guessing where the stock market will go is a loser’s game. Buy strong companies and sit back.
Even hedge funds underperformed last year.
And a P/E of 25 might be a red flag of over-value. Not Investment advice, but during the Clinton boom boom years, a syndicated radio money guy with a newsletter had buy and sell signals that if you looked closely were based on buy @ a P/E of 17, sell @ 21. If you look @ the economic fundamentals of then vs now, and how the economy has changed, one may ask does this economy and our fiscal and monetary policy truly warrant a P/E of 25.....
My prediction, without fear of being wrong is as follows.
At the end of 2014 we will have seen the S&P rise between 3 and 22&, or decline between 1 & 18%
I make this infallible prognostication because I am privy to the following information;
Nothing, I base my projections the same as all the other “analysts” and “experts” on exactly NOTHING because it is all guesswork, all of it.
Until someone invents a way to view the future and learn of world events to come none of anything today’s so called experts have to say about where markets are headed means a thing.
I have been invested 100% of the time since 1981, NEVER having cashed out because of what some expert has said. I have reallocated my portfolio and have done so once or twice annually. My returns over the past 32 yrs have average just north of 13% in a “balanced portfolio of approximately 40% bonds, cash and 60% equities. Investments are both domestic and foreign.
I am thrilled with my return and would even happily accept an 8% return because to me the returns are all “free money” for which I have done exactly nothing except put some thoughtful time into my portfolio allocations.
Even in 1987 when the DOW dropped 22% in one day didn’t get me out. I had it all back in about 18 months and am well ahead of the game today retired at age 53 (1995) and quite comfortable.
This is a rigged game so logic and talent do not apply.. I would be very surprised if it does not crash.
How long can they increase prices at the rate they have been increasing and fudge the figures to convince people that there is no inflation, just to keep interest rates down in order to not collapse our country?
Too many signs lately to be ignored. I think 2014 and 2015 may get a little bumpy.
Many people are coming to me, upset with the low yields their conservative investment advisers are getting them. They are looking to change advisers in order to get into the stock market. That’s a sign that the peak is near!
I have some dealings with a large investment firm... min of $5 mil to open an account, and I can’t believe they have much of their client’s money in long term bonds!!!
What is going to happen is extremely obvious. When it will happen isn't. The bigger another government caused asset bubble gets before the pop, the more economic damage that will be done. This could go on for another 5 years, but the government is setting up the economy for another massive recession. To avoid it, big gov should have stopped pumping air last year, but they had an election to win.
About 15 percent stocks. The rest in bond funds.
I’ve been tempted to move to 20 percent...
Obama left 0 return in Government Bonds. Its coming as rates go up
As long as QE infinity is going, stocks will rise. I think one of the reasons for the push to increase the minimum wage is to get some price inflation going so that the rest of the economy can catch up with stocks a little.
And it’s just another step to inflation followed by hyperinfilation.
Neither is $85 billion/month the Fed is injecting into the economy; that’s a massive bubble ready to burst, at anytime.
How is that a big correction? Stocks went up over 20% last year.
I'd think some profit taking early in the year is inevitable. Waiting for the new year allows people to pay capital gains taxes in April 2015.
I'm never confident about stocks anymore, as it all seems rigged. JMHO
Traditional stock investing and trading is for suckers. Unless you can microtrade in sub-millisecond time frames, forget about being able to play in the game these days (not bashing you bb15; congrats on wise moves!). Its my opinion the market is sky-rocketing because of the big houses that have dark fiber directly into the trade systems running some pretty advanced algorithms and trading on fractions of a cent in very high volume. Mess up your algorithm? No problem, just get the exchanges to reset the playing pieces (which has happened before) and go back at it. Meanwhile, all those fractions add up and compounded with how many billions a month dumped in by the fed? It looks to me that a correction is inevitable because the this market is a hoax and being propped up.
Most predictions about finances are wrong. Including this one.
I never knew a “trader” who made any money. By trader I mean a little guy like myself. I don’t trade, I buy and hold solid companies, mainly small caps with occasional rebalancing as need arises.
The smartest thing I did was to fund both mine and the wifes IRA to the max every year beginning when they first were available until I retired. Even in my accounts outside the retirment area I had all dividends and distributions reinvested and never touched a dime of any of my investments until I was forced to take the MRD on the IRA’s at age 70.5.
I know more than one person who thought they had to make 25-30% or else it wasn’t worth the trouble. They mostly got hammered trying to time the market. These are the geniuses who haveout of the market since late 2008 and are waiting for the right time to get back in. They know they missed out big time and noware waiting for the 50% pull back so they can get back in.