Wall Street upswing should continue
The Dow Jones Industrial Average topped 17,000 last week for the first time ever, but now New Jersey investors are wondering whether the bull market will continue, or if we're in for a correction.
Ken Kamen, president of Mercadien Asset Management, thinks there are lots of reasons to believe the market will continue to move higher. He said the financial meltdown that began in 2008 was really "engineered" by the banking sector, and it triggered a worldwide, negative domino effect that created the worst recession since the Great Depression.
The DJIA had reached 14,000 as far back as 2007, but in many respects Kamen said we're in much better shape now than we were then -- which would indicate there's plenty of room for financial markets to move forward.
"Corporate America is doing better, productivity is much stronger, earnings are continuing to increase almost at record levels, corporate balance sheets are stronger than they've ever been, with more cash than they've ever had," he said, "and at a time where Europe is coming out of recession, Japan and other places have economies that are picking up. There's a lot of macro-factors out there that point to why things have been so strong."
Kamen was quick to temper all the optimism, however.
"I'm not saying that trees grow to the sky and there's nothing but clear sailing ahead, but I think that there's a real tailwind because of technology," Kamen said, "and when you really look at the alternatives, the stock market seems to make a whole bunch of sense."
He said it's important to look at the big picture and all of the positives that are driving the market forward.
"If you're always looking for what the next trade is going to be, you're invariably going to miss them," Kamen said. "For somebody that's really investing for their nest egg, for their retirement, you need to remember that you're probably more at risk by not having a diversified portfolio than you are by having your money under a mattress."