Thursday, March 28, 2013

Stock Market Had a "Good Year" This Quarter

The stock market started off with a bang this first quarter of 2013. Now what?

Well, before we take the money and run, let's remember that the long term is what matters most, and long term the market's direction is up.

S&P 500, Dow close quarter at record highs is subtitled 'In first quarter, S&P 500 gains 10%, Dow rises 11.3%:'

"U.S. stocks rose on Thursday, with the S&P 500 and the Dow industrials finishing at record highs, as investors looked to get into equities as the first quarter came to a close. . . .

After climbing to a high of 1,570.28, the S&P 500 added 6.34 points, or 0.4%, at 1,569.19. . . .

The Dow Jones Industrial Average rose 52.38 points, or 0.4%, to 14,578.54. The blue-chip index, which first took out its 2007 record high on March 5, rose 11.3% gain in the first quarter.

The Nasdaq Composite added 11 points, or 0.3%, to 3,267.52, leaving it up 8.2% for the quarter. . . .

Wells Fargo Advisors on Thursday raised its year-end 2013 target range for the S&P 500 to 1,575-1,625 from 1,525-1,575, which it set last fall.

Wells Fargo cited a broadening of growth into more segments of the economy and expectations that this year will see improving growth from both the industrial and housing markets.

“The period of initial surprise over European sovereign debt issues, the noise of the election year and the period of panic over the fiscal cliff have moved into the past,” Wells Fargo analysts wrote in a note. “We have moved out of a period of deep uncertainty into a period of more moderate uncertainty,” they said.

U.S. markets are closed Friday."

Summing Up

To repeat, the market had a good year in the first quarter.

While it's inevitable that at some point we'll see a 'correction' in share prices, the longer term looks good to me. In fact, I'm guessing that by year end we will be substantially higher than today's close.

In any event, several years from now it's a good bet that prices will be at least 50% higher than today's. And that dividends wil have increased materially as well.

Besides, there's no better place to invest than stocks. Cash is trash, and bonds will perform even worse than cash over the next few years.

We'll have more to say on all this down the road.

Thanks. Bob.

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