While consensus estimates have stocks gaining about 6% in the coming year, top strategist Kenneth Fisher thinks that figure will be much higher.
“Yes, this bull market has moved well past pessimism,” Fisher writes in his latest Forbes column. “But residual skeptics still temper the euphoria that classically death-knells stocks. More standard measures of optimism tend to hit halfway through a bull — and that should be sometime in 2014.”
Fisher sees a big positive for the economy in what many others fear will be a negative: the tapering of the Federal Reserve’s quantitative easing plan. “QE isn’t expansive or bullish — just the reverse,” he contends. “When it ends the party finally gets going good, as yield spreads widen and bank lending, money supply and economic growth finally take off — the exact U.K. experience after they ended their dismal version of this idiocy.” Fisher says America’s money supply has grown more slowly during the current expansion than it has in any other we’ve experienced. “That loosens soon,” he says. “Enjoy the ride.”