“The direction of stocks is still pointed toward the sky, according to Gene Peroni, who predicts the Dow Jones Industrial Average will hit 18,000 before the current bull market ends in 2015.
In a commentary for MarketWatch, Peroni, senior vice president of equity research at Advisors Asset Management, said valuations are appropriate and market sectors are balanced for continued upward momentum.
“Based on the technical qualities of the market’s advances so far this year, the market’s risk/reward ratio remains attractive, both short and longer term,” Peroni wrote. “I see the Dow Jones Industrial Average ending 2013 between 14,750 and 15,100; by the time this cycle ends in 2015, the Dow will be at 18,000.”
Peroni conceded the Dow’s first-quarter advance — more than 11 percent — was “stunning,” and there are valid reasons to expect a pullback. But he suggested investors may do well to ignore such a likelihood.
“Predicting the timing or depth of a decline could prove difficult and may even be distracting, given the broad field of technically attractive stocks at this juncture. The market is being driven by many different and diverse sectors and does not appear vulnerable to any individual micro-thematic event.”
There are several attractive areas investors should focus on, according to Peroni….”
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