By Jackson Henry —-
Remember the saying, “be careful of what you dream of, for it may just happen”. Well, investors in theNew YorkStock Market may be seeing signs of their dream of a market rally come true with the Dow Jones Industrial Average ready to crack the 13,000 mark, after several years languishing in the doldrums.
This forecast lifts the spirit of investors who saw their stock values take major “hair cuts” in the last years due to the troubles in Eurozone andAmerica’s real estate meltdown.
Here inPalau, many have become sophisticated investors and are tracking the movements of the Dow Jones, because our nation’s “nest egg”, (Compact Trust Funds), is invested in the New York Stock Market. Even our Social Security and Pension Funds are invested there. So the better the New York Stock Market performs, the rosier our nation’s financial picture looks.
Today, there are $2 trillion sitting on the “sidelines” from gun shy investors who pulled them out of the stock market when they saw “dark clouds” gathering on the economic horizon. They could not stomach the gyrations of the Dow Jones and many feared financial doomsday becauseEuropewas seen to drag all economies with it, as it falls into the abyss.
According to Kramer, “the bulls are ready to run” and will pull the Dow Jones to 13,000 point because they see dramatic shifts in economic fundaments. Kramer credits consumer spending, which is 16% higher than last year, as the first bright sign. Consumer spending accounts to 70% of the economy, with shoppers blowing $52 billion for Christmas alone.
The other positive economic behavior is the job market. The private sector posted 206,000 new jobs in November, pulling downUSunemployment rate to 8.5%.
2012 is election year in the USand history, since 1948, proves that sitting-in President running for 2nd term, has always triggered stock market to rally higher. In the 14 elections since 1928, S&P jumped higher at an average of 14.6%.
Finally, new money will enter the stock market in 2012 like a tsunami and will trigger the Dow Jones to shoot higher. The new money is part of the $2 trillion sitting on the sidelines now. KKR, Black Rock and Apollo equity firms are holding on to one $1 trillion alone, ready to be unloaded in theNew YorkStock Market. This money will be a shot of adrenaline for stocks.
Stocks in Smart phones, green energy, medical drugs and natural gas are sure to shoot up like rockets this year. So load up your portfolio with your favorites stocks now and see your equities jump faster can you can dream when the Dow Jones cracks 13,000 points this year. Surely,Palau’s Compact Trust Funds will reach new highs in 2012.
NOTE: This is an opinion. Stocks can loose value. So consult your professional advisor.
