Tags: stock | market | return | correction

WSJ: Stock Market Participants See Rough Road Ahead

By    |   Monday, 17 March 2014 05:45 PM

While the Standard & Poor's 500 Index produced a 32.4 percent total return last year, market participants say it's going to be much tougher sledding this year.

So far in 2014, the index has returned just 0.8 percent, and many experts predict single-digit returns for the year. A lot also expect a correction of at least 10 percent.

"It is going to be a bumpier ride," Jim Dunigan, chief investment officer at PNC Wealth Management, tells The Wall Street Journal.

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Last year's outsize increase represents a burden for the market, the paper reports. Stocks usually provide a total return, including dividends, of 10 to 12 percent a year. Last year's gain for the S&P 500 was its best since 1997.

So many experts view 2013's strength as borrowing from this year's potential appreciation.

"We saw some outsize returns last year," Bob Browne, chief investment officer at Northern Trust, tells The Journal. "We think we are in an environment that can support a 6 to 8 percent return a year, including dividends."

The Federal Reserve's tapering of its bond buying, China's economic slowdown and lofty valuations also are seen restraining stocks, The Journal reports.

To be sure, some experts see positives for the market.

"Are we going to see an improvement in U.S. data after the weak data of December and January?" Bob Parker, senior adviser at Credit Suisse Asset Management, tells Bloomberg.

"I think we will. If it wasn't for the problem in Russia and Crimea, we would be having a different conversation and actually the outlook for markets would be very positive."

Editor’s Note: Free Video — ‘Rogue Calendar’ Could Turn 490% Profits

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While the Standard & Poor's 500 Index produced a 32.4 percent total return last year, market participants say it's going to be much tougher sledding this year.
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2014-45-17
Monday, 17 March 2014 05:45 PM
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