The Standard & Poor’s 500 Stock Index has risen 7 percent so far this year, and it likely has at least another 10 percent to go, says Jack Ablin, chief investment officer of Harris Private Bank.
The gain should have taken place in 2011, when the index was unchanged, he tells Yahoo. "With earnings growth the way it was and revenue growth the way it was, I think the S&P 500 should have been up about 9.5 percent last year.”
That’s because stock market fundamentals – valuations and profit growth – have been defying the negative news out of Europe that depressed stocks, Ablin says.
“We see these daunting headlines, but it’s not impacting what’s happening at the company level,” he says. “It’s frustrating for people looking at stocks, finding these unbelievable deals.”
Given that the stock market should already be up 9.5 percent from last year, “with just a little more nudge in profit growth this year, we can get up to the low double digits,” Ablin says.
To be sure, “If we get to 10 to 12 percent by mid-April I’m probably going to sell out and declare victory for the year,” he says.
Ablin’s not the only stock bull. “Be 100 percent in equities,” Laurence Fink, chief executive officer of BlackRock, tells Bloomberg.
“I don’t have a view that the world is going to fall apart, so you need to take on more risk.”
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