Neil Hennessy’s advice for 2018: “Get in front of a correction that’s coming.”
This doesn’t mean the nine-year bull market’s over, he added, during a presentation of his 10th annual Hennessy Funds Market Outlook for press in New York. In fact, the chairman and chief investment officer of Hennessy Funds thinks the Dow Jones industrial average is building toward the 30,000 mark.
According to Hennessy, today’s market reminds him “exactly of the 1982-2000 market.”
“That was a great, great 18-year run,” Hennessy said. “But what ended that market?”
It wasn’t the 1987 crash, or the real estate crash, or even the dot-com bust in 2000. According to Hennessy, it was the euphoria in the marketplace.
“You had the taxi drivers in New York telling you what dot-com stocks to buy,” he said.
But Hennessy doesn’t see this today.
Once everybody starts talking about something, or investors all want to go one way, market euphoria may be upon us, he says.
Since he hasn’t seen those signs, he says, there’s still room to go higher. He thinks the Dow is heading to 30,000 and beyond.
That’s one reason why he thinks the bull market is “here to stay.” Another reason is that corporate profits are still strong, and, according to Hennessy, a small interest rate increase won’t hurt the economy or corporate profits. Hennessy also thinks growth will remain low but consistent.