Dow may entice new blood, Utah investment pros say
With last week's milestone close above 14,000 by the Dow Jones industrial average still fresh on their minds, investors head into a new week today knowing that there are no guarantees the market will continue its charge to its best start in decades.
In one sense, 14,000 was just a number.
Looking at it another way, though, the close at 14,010 on Friday marked the crossing of an important psychological barrier that may help provide the impetus for more investors to return to the stock market, said Sterling Jenson, regional managing director for Wells Capital Management in Salt Lake City.
Jenson added that if some of the "macro issues" that continue to overhang the market the problems in Europe and the negotiations over U.S. budget deficit could get settled, the stock markets may continue to improve.
Albion Financial Group President and Co-Founder John Bird said the close above 14,000 suggests that many investors are "tentatively putting their feet back into the stock market" and if it continues to rise, more will join in and test the waters.
The U.S. economy continues to muddle along, Bird said, noting also that Europe Germany in particular seems to be coming around to the mindset that it is better to keep the eurozone intact rather than let it fall apart.
Bird said he anticipates all of those factors combined, along with improving corporate earnings, will keep the market moving forward.
Edward Jones stock broker Tammy Radice in Salt Lake City pointed out no one ever knows what the stocks will do in the short term. But "we think conditions are favorable for stocks to rise over time."
Radice added that over the long term stocks tend to follow corporate earnings and the growth of the economy, and that both are rising at modest rates.
She said prepared investors expect bumps in the road and know they need to stay invested and add quality stocks to their portfolios, if appropriate, when prices decline.
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