STOCK PREDICTION: DOW 9,000 BEFORE 11,000
UPDATE: 10/8/2010 – The stock market closed above 11,000 today and so I was wrong with this prediction. The market continues to climb despite no progress being made with the economy and unemployment remaining unchanged for months at just under 10%. Right now, the market may be going up in anticipation of the midterm elections where everyone is anticipating gains by Republicans in Congress which would be seen as being good for business and the market.
Unfortunately, I have not bought any stocks during this time period so I have lost out. But I have found that it is best to stay with your convictions and be prepared to be wrong some of the time. No one can be right all of the time and you should do with your money what you feel comfortable doing.
_________________________________________________
Take note that I am not a professional and this prediction on 5/24/10 is just for fun: I predict that the Dow will go down below 9,000 before it goes over 11,000.
If you read any of this blog you will note that I am pessimistic about the stock market most of the time. At least at this time, I think there are a lot of problems in the US and in the world that can really damage enthusiasm for stocks. Anyone wanting to learn how to buy stocks and begin their investing career should go very slowly right now if I were advising them.
Europe is in big trouble as we all know and now there is a new oil spill predicament in the Gulf. Washington and Barack Obama are taking increasing heat from all sides and it looks like it is becoming one big mess for everyone. Who knows how it will end but it won’t be pretty.
Even if company profits are good in the coming months, people still don’t have jobs and the overall mood of the nation is negative. That’s what I’m seeing and hearing anyway. Washington continues to spend and give away money like they can print it (which unfortunately they can) and that will not be good for inflation or anything else.
Is there anything good really going on right now? Home prices remain depressed, people remain out of work, gas prices are high for the summer travel season, and people are angry and ready to vote out politicians in November.
I know none of those things directly influences the stock market but they do influence people’s desire to spend and to invest in stocks. I think the probability is that the economic environment is going to get worse before it gets better. Stock prices will remain under pressure and if you are going to be buying stocks for the first time, you might wait and get a better price a month or two from now. At least that is what I am doing: waiting.
