Bespoke Investment’s Hickey: Bull Thunders to Deaf Ears

Monday, 07 Jan 2013 05:53 PM

By Dan Weil

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The Standard & Poor’s 500 Index has more than doubled from its March 2009 low, but people don’t seem to comprehend the market’s strength, says Paul Hickey, co-founder of Bespoke Investment Group.

“The numbers don’t lie,” Hickey tells The New York Times. “We’ve been having a bull market streak when many people don’t even realize we’re in a bull market.”

He points out an interesting indicator of the market’s power last year. Every day in 2012, the S&P 500 finished above the close of 2011. In other words, the market was up year-to-date each day last year.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

That’s happened in only eight other years going back to 1928, Hickey says. The last time was 1979.

The streak is alive so far in 2013, but the only prior time the phenomenon lasted two straight years was in 1975 and 1976. So don’t let your expectations run wild.

For many individual investors, though, that’s hardly an issue. Many are overly negative on stocks, according to Bespoke.

While pitched pessimism might not be in order, it’s perfectly logical that investors – professional and non-professional alike – would feel uncertainty here.

We successfully avoided the fiscal cliff, but the debt ceiling may turn into an even bigger issue, as an agreement to increase it will be necessary within weeks to avoid a government default.

Meanwhile, the strength of the economy and corporate earnings also remain big question marks.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

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