Big names in the investment industry are saying it’s time to get back into the equities markets, despite the recent slump. Byron Wien, Laszlo Birinyi, and Jonathan Golub say that the decline that has followed the strong rally at the beginning of the year does not change their outlook for markets to resume their upward climb.
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The market declines on top of continued disappointments in economic reports have made investors wary of equities to the point of inciting a mass exodus from equity funds into bond funds since late March.
Citing crowd mentality, Wien says the best time to buy equities is when investors en mass are avoiding them. He says that economic reports have brought expectations for growth down to a more realistic level and that the impact of disappointments will no longer be as great.
Birinyi has tempered his forecasts based on reports on economic growth but that the increasing bearishness of investors indicates that the equities markets should resume their rise. He views the upcoming rally as the last stage of the bull market and that those rallies tend to be substantial.
Golub predicts earnings on the S&P 500 will reach $105 and that the index will hit 1475 by the end of the year as a result of that earnings improvement. If a European country is allowed to default, his predictions will change but he has confidence that leaders both in the US and Europe will take actions to reign in the current crisis.