Dow Prediction for 12/31/10

[W2R]

Sorry, I got confused. The poll asks what the Dow will be at on 12/31/20. I thought it was just for fun, since nobody could have even the slightest clue. I should have figured it out by looking at the numbers. Too tired from working in the garden today, I guess.

Thanks for pointing that out. I took the liberty of correcting that typo for shotgunner.

 

[Ronstar]

I'll say 11505

 

[DeborahB]

I can't remember which button I pushed in the poll! I think it might go above 12,000 but might be 9500 also. And I can live with either although I'd like to see it go up in 2011. I don't think it will drop below 9500 unless something catstrophic happens.

Even so, who was predicting over 11,000 by now when the Dow was 6600?

 

[W2R]

I can't remember which button I pushed in the poll! I think it might go above 12,000 but might be 9500 also. And I can live with either although I'd like to see it go up in 2011. I don't think it will drop below 9500 unless something catstrophic happens.

Even so, who was predicting over 11,000 by now when the Dow was 6600?

When the Dow was 6600, I was actually predicting that it would go down to about half that by the end of 2009. Apparently my approach to prediction is heavily influenced by (projected) persistence of recent trends.

 

[Spanky]

According to Jeremy Siegel, the Dow should reach 11,916 while the S&P 500 may rise to 1,300 by year end.

 

[km4hr]

I calculate 12345.67. Not to put too fine a point on it.

 

[donheff]

We are a pretty bullish group. Irrational exuberance or rational expectations? I keep reading about the retail investors who pulled out last year and haven't gotten back in yet. Thank God for those folks.

 

[IndependentlyPoor]

When the Dow was 6600, I was actually predicting that it would go down to about half that by the end of 2009. Apparently my approach to prediction is heavily influenced by (projected) persistence of recent trends.

Last year, when the DOW was at its bottom, we were looking at 5 year investment returns of zero, nada, zip. At the time, before my small pension began, we were living entirely from our investments. A five year zero return meant that effectively, we had been spending principal for five years. What if it continued? Yikes!

The five year investment return chart is still there under the personal return tab of our mutual fund site to remind us of that nightmare time and of the amazing recovery.

It turns out that the chart's earliest date corresponds to my retirement date and the time when the account was funded, so the 5 year returns begin at zero.

All's well that that ends well?
Dunno.
We didn't buy that condo we wanted (we rent). Missed opportunity? We cut back on our spending so that we were very close to living entirely from dividend income. We didn't sell anything from our plain-Jane, conservative index fund portfolio. On the other hand, we didn't rebalance when we should have either.

Predictions?
All I can say is that whatever the DOW is at year end, I will be worried... and a lot more cautious than before.

 

[FUEGO]

We are a pretty bullish group. Irrational exuberance or rational expectations? I keep reading about the retail investors who pulled out last year and haven't gotten back in yet. Thank God for those folks.

I think given the long downward spiral we saw since 2007, we are in for a few years (maybe not a few CONSECUTIVE years however) of above average returns. Last year we had that. We are on track for above average returns this year.

And yes, I think a lot of investors are still hanging out on the sidelines. A recent mutual fund flow report showed almost nothing going into equities mutual funds, and many tens of billions into bond funds. The recent volatility of 07-08 may have scarred everyone into being more conservative. Until they realize getting 12%+ a year from the recent market is better than getting 4% from bonds, or zero or negative from bonds if rates rise suddenly.

Just my $0.02.

Also, regarding the poll/contest, are we playing Price is Right rules, or closest to the correct number rules? And I'll suggest that anyone who provides a range should have their official entry marked as the midpoint between their range. Otherwise, I'd like to suggest a range of 0 to 1,000,000 as where the Dow will end up.

 

[donheff]

And yes, I think a lot of investors are still hanging out on the sidelines. A recent mutual fund flow report showed almost nothing going into equities mutual funds, and many tens of billions into bond funds. The recent volatility of 07-08 may have scarred everyone into being more conservative. Until they realize getting 12%+ a year from the recent market is better than getting 4% from bonds, or zero or negative from bonds if rates rise suddenly.

Hopefully, after another up year they will pile back in next winter keeping things going another year before we settle down into the predicted blah returns.

 

[FinanceDude]

Sheeeesh, are you still pushing this gloom and doom?

Is this called "churn and earn"

All I am saying is REBALANCE and TAKE GAINS..........

 

[rescueme]

Who looks at the DOW? Really....

 

[IndependentlyPoor]

Who looks at the DOW? Really....

Gosh... I do.
It is all over the place, and remains a pretty good proxy for VTSMX, Vanguard's Total Stock Market Index. I can see the DOW on a bank sign driving down the street and easily estimate my portfolio value.

 

[easysurfer]

12,999.

I chose that over 13,000 to pretend that I actually have a clue as to where the dow will end up

 

[audreyh1]

I had to scratch my head for a while before responding. I don't really care where the markets end up at the end of the calendar year, so I rarely think about it.

But I'll take a stab - I choose DOW 10,900. This is a little over 4% up from start of year.

I think there will be several things weighing on the market later in the year, and I think the peak in the DOW will occur in the first half, and then there will be a grind lower due to several factors:

• economic numbers don't continue to look great, but the economy starts to appear weaker in the second half (although I do think employment will continue to improve.)
• there might be more global economic type scares as the year goes on.
• company earnings in the second half won't be nearly as spectacular in year-over-year comparison as they were in the first half, and this may lead to disappointment.
• Tax selling due to expiring tax cuts on cap gains: I think this has been going on already and hasn't stopped the current rally, but I think it could intensify later in the year, especially if people decide that the market has topped out and they might as well take their profits.

OK - taking off predictive thinking cap. My brain hurts!

Audrey

 

[audreyh1]

I can't remember which button I pushed in the poll! I think it might go above 12,000 but might be 9500 also. And I can live with either although I'd like to see it go up in 2011. I don't think it will drop below 9500 unless something catstrophic happens.

If you look at the poll after voting your choice is in italics.

Audrey

 

[W2R]

So far, about 86% of us think the Dow will be over 10,500 by the end of the year.

Given that it has only recently exceeded 11,000, where are the bears? We seem to hear so much bear-ish talk on the board that I had assumed that over half would think the Dow would fall below 10,500 by the end of the year.

Maybe the bulls are the "silent majority" in this case. (?)

 

[MuirWannabe]

I calculate 12345.67. Not to put too fine a point on it.

Excellent prediction. To continue on that path I'll say the S&P500 will be 890.-=

Took great thought to complete those calculations

 

[MichaelB]

where are the bears?

Yosemite?
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[W2R]

Where are the bears?

Yosemite?

 

[Steve O]

Ahh I wanna change mine to 6660

 

[73ss454]

All I am saying is REBALANCE and TAKE GAINS..........

OK, and what do we do with the $ at that point.

Since I'm not smart enough to know what the market is going to do or when it's going to do it, I think I'll just stay fully invested and hope for the best.

 

[kyounge1956]

I voted for 11500-12500. I think it might go over 12500, but not stay there. Why?

Just 'cuz.

 

[audreyh1]

OK, and what do we do with the $ at that point.

Since I'm not smart enough to know what the market is going to do or when it's going to do it, I think I'll just stay fully invested and hope for the best.

Well, technically, rebalancing takes gains from the winners and invests them in the laggards. You remain fully invested.

Audrey

 

[DeborahB]

Originally Posted by thinker25
I can't remember which button I pushed in the poll! I think it might go above 12,000 but might be 9500 also. And I can live with either although I'd like to see it go up in 2011. I don't think it will drop below 9500 unless something catstrophic happens.

If you look at the poll after voting your choice is in italics.
Audrey

Aha! - Thanks! Well I want to change my vote, I think it will go higher. I was in the 10500 to 11500 group - I think that's conservative. 11500 - 12500 is my current guess.