Catch my NEW Selling Stock Options for Current Income blog here: https://stockoptionincome.wordpress.com/2016/01/02/selling-stock-options-for-current-income/
I say this with tongue firmly planted in cheek. I can no more forecast, and tell the future, than anyone else.
However, we do have some tools and intelligence that might help. Knowing that the greatest influences on stock prices are, in order, inflation, interest rates, economic growth or stagnation, and finally, corporate earnings… I do have access to the “analysts’ consensus of forward-looking earnings estimates”.
They tell a fascinating tale. One year ago, the EPS forecast for the average of all 500 companies in the S&P 500 was for them to earn an estimated $4.52 a share. Today, that very same estimate, now looking to this time next year, stands at $4.51 a share for what has been essentially, all this year, and as they attempt to look clear through next year… no change, zer0 growth!
It sort of stands to reason, doesn’t it? What did the market do almost this entire past year, but to mark time, go back and forth, up and down, and essentially now be trading right where it was just over 13 months ago… right?
So, with NO projected earnings growth currently in the forecast… and, I will also add this caveat, with (** name deleted) plotting with its own proprietary algorithm, a calculated average value of each share in the 500 to be at $83.05 a share, while the actual average price per share closed Thursday at $82.13 a share. We’re looking right at FAIR VALUE.
We’re at fair value, and at NO projected earnings growth. The only logical conclusion anyone could draw from that information available to us at this time… is that this market is not likely to do anything in 2016, but more of the same as it has done since the latter part of 2014! Now, isn’t that exciting? As best I can tell, we’re going to be doing much more of the very same, for the foreseeable future.
What does that mean for a safe-dividend growth investor like me? Only that I’ll be so glad to be focusing and concentrating on growing a portfolio dividend income, as that may be the only way anyone will be making any money in 2016. That’s how I see it right now anyway.
(Editor’s investment opinions are subject to sudden change for no apparent reason whatsoever. LOL!)
Here’s to your successful investing in 2016!
Harold F Crowell
To all (** name deleted) users: You may have seen (** name deleted) forecast, which became available at 12:09 a.m. Saturday morning. For the record, I wrote the above at 11:23 a.m. EST Friday morning, and saved it for release at this time.