The broad market has climbed 7.5% in 2012, the most since 1991, as recent unemployment numbers indicated a decrease in the jobless rate and interest rates are slated to remain low through 2014.
“The low rates certainly help, as does the deduction for qualified dividends,” says AdvisorOne contributor Ben Warwick (left), CEO of money management firm Quantitative Equity Strategies. “Will it continue? I’m generally bullish. Investors are moving into lower beta names as an alternative to fixed income because the yields are higher.”
Combined with the positive outlook for employment, Warwick calls it a “sweet spot for the market.”
“It’s almost like a repeat of last year at this time,” he adds. “We started very strong in 2011, but fell apart last summer. Could that happen again? Sure. But it’s strong now, so here we go.”