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Dow Theory's Russell: Get Ready for 'Shock and Awe' as Stocks Rocket Higher in 2015

By    |   Tuesday, 30 December 2014 01:07 PM

Veteran stock forecaster Richard Russell, editor of the Dow Theory Letters, predicts the U.S. market is about to enter the third — and possibly the most profitable — phase of an epic bull market.

Russell says his 60 years of experience in financial markets tells him his optimistic outlook is on the mark for 2015.

"Is it too late to enter the market? Readers should remember that stocks often advance as much in their third phase as they did in the first and second phases combined. Like a giant magnet, the US stock market is in the process of attracting money from all over the world," he writes in an excerpt from his subscription newsletters published on Financial Sense.

"The time to enter this third phase of the bull market is now."

Russell, who has been a parade of both bull markets and bear markets over the years, dismisses naysayers among market analysts who are too young to understand the sentiment phases of a strong stock market.

When the third stock market phase gets into full swing, he predicts it will lift all economic boats.

"I realize that there's a great deal of skepticism regarding my third phase thesis. But the skepticism is healthy and it will be followed by shock and awe as the stock market surges steadily higher. My belief is that the coming of the stock market boom will envelope everything from housing prices to precious metals to all commodities."

The one thing that will eventually stop stocks' soaring rise is that the Federal Reserve will continue to raise interest rates, eventually putting a brake on the party, Russell predicts. However, the stock market will "ignore rising interest rates up to a point, and continue to push higher."

"If we are heading into a market that will break records for excitement and overvaluation, the forthcoming third phase will be driven by the fear of being left behind," he wrote. "Decades from now, people will talk about having been there in the third phase of the great bull market."

Jeremy Siegel, the Wharton finance professor who correctly predicted the Dow Jones Industrial Average would hit 18,000 this year, predicted the index will have a tougher time making it to 20,000 in 2015.

Siegel tells CNBC it was easier for the market to move higher in recent years because stocks were still cheap.

"I mean, it was a slam dunk. The market was so undervalued with the interest rates so low, and earnings momentum going up. . . . Earnings momentum is going up, but we are closer to fair market value," he explained.

MarketWatch columnist Mark Hulbert says he is suspicious of annual new year's stock predictions that rely on past data. In his view, stock predictions are a game of chance because every year is different.

"The stock market's returns in any given year are independent of what happened before. Just as a coin doesn't remember whether its previous flip came out heads or tails, the stock market focuses on the future, not the past."

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Veteran stock forecaster Richard Russell, editor of the Dow Theory Letters, predicts the U.S. market is about to enter the third — and possibly the most profitable — phase of an epic bull market.
Russell, stock, market, bull
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2014-07-30
Tuesday, 30 December 2014 01:07 PM
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