2012 Yearly View and 2013 Market Prediction
The US Stock Market Will See New Highs in 2013
January 02, 2013
Latest Update on the Fiscal Cliff
Senators passed a bipartisan agreement 97:3 in the middle of last night. The House members were gathering today to decide whether they would go along with the Senate's approval of a last-minute deal to pull the U.S. back from the so-called fiscal cliff.
Now is our Yearly Review
2012 finally came to an end. In our January 2, 2012 Weekend Edition, we predicted that 2012 will be a good year for the US stock market. The following is what we said in that Edition:
"Our view is that 2012 will be a very good year for US stock market. Yes there is no question that world economy faces a lot of uncertainties or difficulties. European countries are entering recession, China's economy is slowing. But US economy will be in good shape this year and corporations as a whole will make more money this year than they made in 2011."
We also made our projection in that Edition that S&P500 will be closed at 1,429 at year end.
Our projection proved to be very accurate. S&P 500 closed at 1,426.19 yesterday, only 3 points away from our projection.
And all three major indexes made good runs for the year. The following table showed the actual returns from the three major indexes:
Last year's lager becomes this year's star. Nasdaq gained the most among three major indexes, up +15.91% this year via -1.90% loss for 2011; S&P 500 gained +13.41% via -0.235% 2011 loss. DJI was last year's star with +5.52% gain. But it finished the third place with +7.26% gain this year.
Our two Portfolios and Short Term Play all beat the market by huge margins. See the table below:
Our Short Term Play (STP) had a non-compounded gain of 204.96% in 8 months. That is, if we used $10,000 for each trade, the money would have become $30,496 now.
Our $5K Portfolio gained 65.47% for the year, grew the money from $13,014.76 at the end of 2011 to $21,535.78 now. $5K Portfolio started on June 2009 and already ran 3 year and 6 months up to today. We have made a total return of 330.72% so far via S&P 500's +55.17% gain during the same period of time.
Our Core Portfolio is up 31.51% this year and closed at above $600k for the first time. Core Portfolio started on February 2009 and ran 3 year and 11 months now. We have made a total return of 172.32% via S&P 500's 72.69% run in the same period of time.
Now our prediction for the year of 2013:
2013 will be another good year for the US Stock Market. After huge bull runs in 1990s, which ended on March 2000, the market has not given us any meaningful return since then.
S&P 500 reached its high of 1,552.87 on March 24, 2000 and took over seven years to make a new high of 1,576.09 on October 11, 2007. Now at 1,426.19, the S&P 500 needs to gain an additional 10% just to reach its all time high again. We can say that the market in fact has been in bear phase for the last 12 years. We can also say that the market is building its 12 year base to prepare for the next bull run.
Our projection: We will see new highs for the S&P 500 this year and may see 1,600 at the end of this year.