Anybody out there want to make a market prediction for 2003??
My track record for predictions a year or more out is not great, but I'll stick my neck out anyway. Since early October I have been bullish on a long term (one year) basis. Although the market is up quite a bit since then, I still look for a positive 2003, but perhaps just a 10% move from here.
Why the optimism with a falling dollar, rising gold, housing bubble, war with Iraq starting soon, continued excessive valuations, economy on verge of a double-dip recession, high and rising oil prices, etc...........because all that is factored into the market already. If I'm aware of all those problems the market is surely far ahead of me.
So, we just need a little unexpected good news to give the market a lift. Maybe Saddam turns over the government to a new regime and leaves without fighting (I doubt it but who knows), maybe the liquidity injection and falling interest rates finally kick in and the economy strengthens more than expected, maybe oil prices drop to $20-25 once Iraq is resolved effectively providing a nice tax cut, maybe there is a logical reason the third year of the Presidents term is nearly always a positive year and it happens again, maybe all those retired folks with CD's and MM's earning 1-3% taxed at full rates will buy stocks yielding 1-3% if the dividends aren't taxed, and then maybe Microsoft and others start paying dividends and higher dividends attracting even more money into the market from money market accounts and CD's.
All that should at least give us the ammo to have a positive year after three straight declines; even if its not a big gaining year. Of course, despite my optimism for 2003, the market profits should be bigger and lower risk utilizing market timing to take advantage of the inevitable swings, so no "buy and hold" here.
Anybody else want to make a projection?
Tom |
