ETF Strategist Editor David Frazier sees the stock market rebounding sharply in coming months as investors stop focusing on the current recession and start focusing on recovery.
“I see equities trending significantly higher over the next few months,” says Frazier, whose ETF investing letter, The ETF Strategist, helps investors get ahead of major market trends.
“The folks you hear talking about the economy and unemployment apparently are incapable of looking into the future. The only thing they can do is look into the rear view mirror.”
It’s more important to concentrate on conditions moving forward in order to profit from coming events, Frazier says.
“What I see going forward is a housing market in the bottoming process,” he explains. “I think we’ll see significant improvement in the housing market later next year.”
In addition, there is plenty of cash sitting on the sidelines, thanks to investors liquidating their stock mutual funds, Frazier says. “That money is now sitting in money-market accounts,” he says.
Investors “can’t make money in bonds and other short-term debt securities. Once they feel more comfortable about the economy, they’ll start putting money to work in the equity market.”
Another supporting factor: “Selling pressure has pretty much evaporated,” Frazier says. “The people who are really worried have gotten out.”
Frazier isn’t alone in his optimism for the market. Several major fund managers, including Legg Mason’s Bill Miller and Laszlo Birinyi, president of Birinyi Associates, recently also called a stock market bottom.
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