“Last July, when stocks weren’t doing so hot and the Dow Jones Industrial Average rested below 12,900, Seth Masters, chief investment officer of Bernstein Global Wealth Management, made a bold call.
He predicted the Dow would reach 20,000 by the end of the decade. And he’s sticking to his guns, The New York Times reports, even though the prediction isn’t quite so controversial with the Dow closing at 15,091 Monday.
“It seems we’re somewhat ahead of schedule, but I think we’re still on track for Dow 20,000 by the end of the decade,” Masters told the paper. “The odds have just gotten better.”
He still thinks stocks are cheap as compared with bonds.
“It’s not that the expected return on stock right now is really that high,” he said. “It’s that the return on government bonds is indubitably very low.”
The 10-year Treasury yield stood at 1.92 percent early Tuesday morning.
To be sure, the rise in stocks won’t be straight up, Masters says. “I don’t think the path to Dow 20,000 will be linear. … There will be declines, you can count on that.” …”
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