2013 Outlook, Part 1: Stocks

We expect the markets to react negatively to the reduction in quantitative easing by the Fed. We feel, in fact, that much of the success and resilience that stocks have shown over the past three years have been due to these programs.

Further, the fiscal cliff deal that will return capital gains rates to pre-Bush levels will have a negative effect on all long-term assets, including stocks.

When we roll our magic dice and shake the magic eight ball, both come up with -3.2% for the S&P 500 for 2013.

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