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The Big Picture For The Week Of July 9, 2006 at 2006-07-09 19:47:55
BusinessWeek had a midyear followup of its 2006 survey of market forecasts. The follow up had brief opinions from four people listed in the graphic along with their expectations for the Dow, S&P 500, Nasdaq and Russell 2000. The graphic also lists their current asset allocations.
I think there are a couple of mistakes on the graphic based on the text of the article. First, Warren Bagatelle expects the Dow to finish the year at 11,150 and the S&P 500 at 1365 but the article says he does not expect much for the rest of the year. Something doesn't add up there, maybe he means 1265 which is where we closed on Friday.
The other mistake is in the allocation from Barry Freeman. The graphic says 40% in domestic stocks, 40% in foreign stocks, and zero in bonds. The text says 40% in domestic stocks, 40% in bonds and makes no mention of foreign stocks.
I know one or two people from the magazine stop by this blog now and then, perhaps someone can shed some light?
None of that is even the point of the post. Depending on what Mr. Freeman really has in mind, either two or three of the four people profiled have zero weight to foreign stocks. Just because I think there is a clear and obvious path for outperformance from foreign investing doesn't make it correct. I could be wrong.
But zero is a big bet. Only one of the four appears to advocating a diversified portfolio based on assets class exposure. In that a major theme of this site is trying to help do-it-yourselfers get better results with a little less risk; one of the virtues of proper diversification is that you don't need to be right about as many things to have success. I would think this would appeal to people that do not want to make their portfolios a full time job.
