The Biggest Reason the Dow Could Soar in 2014

Last year was a banner one for the Dow Jones Industrials (DJINDICES: ^DJI  ) , which enjoyed their best year since 1995. Yet many are calling for a correction. Will 2014 be a bad year for the Dow, or is the better play to act like a contrarian and bet on further gains?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, provides one reason why the Dow could soar in 2014. Dan notes that calls for a correction seem perfectly reasonable, given huge gains for Boeing (NYSE: BA  ) , American Express (NYSE: AXP  ) , Disney (NYSE: DIS  ) , and other high-profile stocks in the market. Yet when you listen to commentators, most of them appear ready to buy after a correction. Dan notes that investors' willingness to buy dips puts a floor under the market that actually discourages corrections. He suggests that absent negative surprises, you should expect gains to continue until analysts start recommending not waiting for dips to buy. At that point, the floor could go away and the risk of downside moves will increase.

Take a long-term view
Being cautious at market highs isn't a bad move, but trying to time the market is asking for trouble. After all, millions of Americans have waited on the sidelines ever since the market meltdown in 2008 and 2009, missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2783396, ~/Articles/ArticleHandler.aspx, 10/22/2014 4:36:41 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement