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Half think market will rise over year

Fifty percent of respondents to this week’s RBJ Daily Report Snap Poll predict the stock market is headed for a rise over the next 12 months. Of those, 14 percent see a double-digit rise. Nearly a quarter of respondents say the market will be flat.

U.S. stocks traded higher Wednesday after another sharp drop Tuesday. This followed the market’s wild ride last week. Stocks plummeted on Monday last week—when the Dow Jones Industrial Average shed 1,090 points in the opening minutes of trading—and Tuesday, then rebounded strongly in the next two trading sessions. The market ended the week in positive territory, but with a sharp decline in the prior five-day period, it finished August with the worst monthly performance in more than three years.

In spite of the volatility, nearly 60 percent of respondents say stocks are today’s best long-term investment. Roughly one in five think real estate is a better bet, compared with 6 percent who would invest in bonds and 5 percent in gold.

In a November 2013 Snap Poll, conducted as the Dow and S&P 500 index were trading at or near record highs at that time, 65 percent of respondents said stocks were the best long-term investment; 13 percent chose real estate, 10 percent picked gold and bonds were favored by 5 percent.

The market’s sharp downturn was triggered by concern about China—the slowdown of the world’s second-largest economy and the plunge of its main stock index, which dropped nearly 23 percent over five days. Other factors include falling oil prices and concerns that the Federal Reserve will hike interest rates at its September meeting.

Market watchers have differing opinions on where the stock market is headed. Some say a correction—a drop of at least 10 percent from recent highs—is overdue; the last one occurred some four years ago.

Others point to the unexpected strength of the U.S. economy in the second quarter, when GDP increased at an annual rate of 3.7 percent, and say it will buttress equity prices.

About 350 hundred readers participated in this week’s poll, conducted Aug. 31 and Sept. 1.

Where is the stock market headed over the next 12 months?
Double-digit rise: 14%
Single-digit rise: 36%
Basically flat: 22%
Single-digit decline: 15%
Double-digit decline: 13

In your view, what today is the best long-term investment (10 years or more)?
Stocks: 58%
Real estate : 21%
Bonds: 6%
Gold: 5%
Other commodities: 4%
Other: 6%

COMMENTS:
A health-restoring correction is overdue. There hasn’t been one in too long. However, this will represent a buying opportunity. The fundamentals of low inflation and slow growth coupled with strong corporate profits show there is still a good deal of upward potential in the major stock indexes going into 2016.
—George Thomas, Ogden

Having been a financial adviser for more than two cycles, we are going to see a period we call flat. We will see great turbulence; swings up and then down. When we average that over a period of time, there will be little change.
—Joel Stauring, Multiman Consulting

Ignore the man behind the curtain! Is the stock market random? It sure seems to be some days. Is it too big to fail? I would say yes. Now so many people are relying on income from stock investments instead of Social Security that if the markets fail to return 8 percent to 10 percent per year, more people are forced to stay or re-enter the workforce; unemployment goes up and recession here we come. Much of the market movement seems to be driven by the press and comments from a chosen few. Those are the ones who make the market move. When it comes right down to it, in the long run the market needs to go up to keep the system running. Let the games continue!
—Mark Williams

I believe the stock market will follow the trend our former great nation is currently, and until next November, and that is a downward spiral at high speed. Hopefully our snoozing elephants will wake up and find a candidate to return our country to us.
—Daniel Mossien, architect

It will be up … no, wait, it will be down … no, wait, it depends if we get a white Christmas…no wait, is Dec. 31 falling on an even numbered date or an odd one … no, wait ….
—Jay Birnbaum

Historically, the market rises significantly after a correction. I never would have believed the Dow would be over 15,000.
—Gary Wood

Typical, the law of gravity: “What goes up, must come down”—at least that is what we have learned over the last 100 years. Today: no different; China notwithstanding!
—J.A. DePaolis, Penfield

Talk with your financial planner and hope they understand what your goals are. I have a long way to retirement so I can certainly handle some up and down. Just hope you are buying low!
—Keith Newcomer

Is the market going up or down? Yes, but not right away.
—Jim Haefner, Pittsford

9/4/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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