Modest (and appropriate) expectations: Think holding Dow 8,000
Posted by: admin in Stocks Money News
Filed under: Indices, S and P 500, DJIA, Recession, Financial Crisis
With the nationalization of banks seemingly exceeding IPOs these days, to say that both developed and developing nations economic performance expectations are more-modest today than they were a year ago would be an understatement.
Still, investors would be wise to take a page from that playbook, as it relates to the Dow, and more broadly, to the U.S. stock market, so says economist Richard Felson.
Concentrating on the problem, not the inconvenience
Felson, who took pains to point out that he is not a market analyst or stock guru, nevertheless highlighted the importance of reining-in stock expectations: people who are ‘looking for the market to rally,’ or who look for a relatively quick turnaround in stocks in a quarter are missing the point.
“The purpose of the monetary and fiscal actions being taken is to maintain the financial system, so that there are stock markets, not to get the Dow to rise, or to create the next bull market,” Felson said. “Investors need to keep sight of that fact.” Today the Dow closed down 678 points to 8,579 and the S&P 500 was down 75 points to 909.
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