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For the first time in years, there’s dissension in the ranks of the Barron’s strategists.
Their consensus outlook for U.S. stocks in the remainder of 2016 is mixed and even tinged with a bearish hue. That represents a downgrade from the cautious optimism seen last December, ahead of the coming year.
Their mean expectation for the Standard & Poor’s 500 index is 2138 at year end, below Friday’s close of 2180. Four strategists call themselves bullish, three are in the bear camp, and three are neutral.
Regards,
Ted
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=Barron’s+Survey:+Strategists+Say+Beware+the+Bear
Comments
Thanks for the reference to the Barron's forecasting article.
But regardless of the impressive credentials of the 10 person expert team assemble by Barron's, the forecasts are rather pedestrian and not confidence inspiring. The team projects modest equity gains for next year. That doesn't take much courage given the fact that equities generate positive annual outcomes over 70% of the time.
The experts diverge rather remarkably for the brief timespan remaining this year. Their year end projections diverge by 15% with a high of 2300. It's a demonstration of just how challenging the market prediction game is.
It's famously said that round number predictions are not to be trusted. When the situation is so uncertain, I believe the opposite is true. I would distrust forecasts that falsely claim accuracy with a fine granularity to the numbers quoted. In this instance I like the rounded character of the expert's estimates. That's what they are - just difficult estimates.
Barron's would do its customers a greater service if they also included a scorecard for each of the team members past forecast accuracy. That just might be a little embarrassing, although very educational. Studies do show that professional investment organizations score better returns than do individual investors. Somehow, perhaps overconfidence, we do manage to rank near the bottom of the pile. That's why Indexing and being inactive often yields superior returns.
Thanks again for the excellent reference.
Best Regards.
I think I'll stick with my SWAG ... for me, it's just as good as these highly paid strategist's projections.
After all, if someone could call the market's direction with regard to it's peaks and to it's valleys with great consistency do you really think it would be made public to the small retail investor?
I have heard it said many times the market is fairly valued. Come on in and invest your hard earned dollars the market is just fine with stocks now selling towards their recent 52 week highs with a current reported earmings (TTM P/E Ratio) of 24.7. Some market analists have forward estimates projected at a ratio of 18.6 for the 500 Index. I wonder why they keep revising these estimates downward as companies begin to report? Simply stated, earnings estimates are set way too high to begin with. Folks, currently as reported earnings are being reported in the high $80.00 to low $90.00 range where foward estimates are coming in at the $115.00 range. Go figure. It's absurd. They get revised so the analist's beat rate can continue. The crowd goes wild and the buying continues. A year ago as reported earnings for the S&P 500 Index came in at $90.66 for September 2015 and they are projected to come in for September 2016 at $90.83. What happened to the mid $120.00 estimates as we entered 2016? And, the 130's that was in place during the beginning of 4Q2015? Within a years time, estimates have dropped from the 130's to the 115's and will most likely be reported in the low 90's range.
After a more indepth review of my portfolio since my earlier comment this morning made in another thread I am currently a little North of my 45% mark in my equity allocation. Back in July, I was a little South of the 45% mark but it still rounded to 45%. Now, since equities have had a nice upward move since late June this puts me a little North of the 45% mark. Perhaps, its time to again trim a little from my stock allocation ... I mean rebalance.
Can you hear the bear's roar?
I suppose it's fair to say that as I age, I have become more and more skeptical and just short of paranoid with respect to the real skill sets of market wizards. Do they really exist?
I tend to rate market forecasters and active fund managers as having similar forecasting and stock selection performance records. I anticipate that they will be on par with each other in terms of accuracy. I have modest expectations. I would happily accept mediocracy. I still patiently wait to satisfy that modest goal. Hope springs eternal!
Best Wishes.
Thank you for your inquiry.
In June I sold all shares of IACLX & VADAX which were held in my large/mid cap sleeve which is found in the growth area of my portfolio with the sell proceeds settling to cash manaement sleeve. In addition, all funds within my portfolio pay their distributions to the cash management sleeve with the exception the holdings in my health savings account which reinvest. Actually, I need to trim equities to keep within my valuation matrix scale as equities have crept North of the 45%. However, I am thinking of holding off a bit on doing this. To keep cash for growing higher inside the portfolio I have taken some distributions and built cash reserves outside the portfolio that are targeted to pay property taxes and homeowner insurance premiums before yearend.
Thus far this year during the Jan & Feb selling stampede I did some buying in FDSAX & DEQAX plus a couple other funds. During the Brexit I did a little more buying during this market swoon and also open a new position in a small cap fund. Other than this I been awaiting another market pull back before commiting new cash for stock market investment purposes.
From a performance review my investment returns have bettered the Lipper Balance Index and when including cash held have matched it. So, I don't feel I have given anything up by holding a good amount of cash thus far this year. I am awaiting a sizeable stock market pullback, possibly a correction, before I put new money to work. Most likely, I'll be looking at my low p/e ratio funds and add to some of these. At this time, I am not certain where I'll put money to work although I do have a few funds targeted. The low p/e ratio funds that I am currently looking are AJVAX with a TTM P/E Ratio of 11.37 ... TSVAX with a TTM P/E Ratio of 12.17 ... THOAX with a TTM P/E Ratio of 12.43 ... LPEFX with a TTM P/E Ratio of 12.88 ... and, HWIAX with a TTM P/E Ratio of 13.89 plus a couple of other funds that are currently selling a good bit back of their 52 week high are also on my list.
Is she a perpetual bear or what? The sky is falling.
Please tell me this magazine will get more optimistic as I get closer to the current issue.
You've given me some good funds to read up on. Thanks very much!
Michael