Every personal finance and investing blogger needs to have the compulsory stock market predictions for the New Year. It goes hand in hand with the article that we all always right about how to keep your New Year’s Resolutions. I thought that it would be kind of fun to give you a prediction of where I think the stock market and the economy will be at the end of the year on December 31st, 2012.
So, below are my stock market predictions for 2012…
- Stocks will continue a steady increase coming out of the Recession and pick up a normal growth rate of 8% gain again in 2012. The S&P 500 Index will end at 1,357 and the Dow Jones Industrial Average will finish this year at 13,194 on December 31st, 2012.
- Apple will finally start issuing a quarterly dividend in 2012
- Facebook will finally go public with the world’s largest public offering ever late in the year
- President Obama loses and is not reelected to a second term
- Unemployment will finish 2012 under 8%.
- America will see a steady, healthy 3% inflation rate.
- Home values will stabilize across the country with most regions reaching a 1% annual growth on home prices.
- The Federal Reserve will raise the Federal Funds Rate to 0.75%.
- GDP growth in the US will be 3% in 2012.
- Mortgage rates and the interest rate on the 10 Year Treasury will start to increase, steepening the yield curve. The 30 Year Fixed Mortgages will be at a 5.0% interest rate by the end of the year.
- The personal savings rate in America will continue to fall and finish the year at 1.0%.
No one knows what the future holds, of course, but I thought that it would be fun to have a little guess and make some economic and stock market predictions for the new year. I will try and revisit these key economic indicators and stock market predictions throughout the year and finish the recap on December 31st 2012 to see how my stock market predictions pan out.
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{ 6 comments… read them below or add one }
Hey Hank – good list of predictions. It’ll be interesting to see what Apple does with all that stored cash. If they start issuing it as a dividend, I think people will think that they’ve run out of ideas, so I’d argue against you on that one. But we’ll just have to see! (I really hope you’re right about the 8% return with the S&P..it’ll be nice to get some strong returns going.
Hack – Smart Money Hacks recently posted..10 Turbo Tax Discounts and Coupons
That’s a good point about running out of ideas. I am a huge fan of dividends though, and I’d love to see some of that money be given to shareholders. Then, they can start to raise the dividend and the share price will follow suit.
Hank recently posted..A Selection Of Articles Written This Week
Sam over at Financial Samurai is convinced Obama will win again (I think I agree), you should go and give your reasons why he won’t here: http://www.financialsamurai.com/2012/01/01/financial-samurai-predictions-for-2012/
I kind of feel like after the rocky world year we will see a lot of world scale changes this year, I just don’t know what!
Forest Parks recently posted..Taxes On Yoga Classes
I saw Sam’s post yesterday when I was writing up mine. I don’t know if I even have a good reason why I don’t think President Obama will lose reelection. Maybe it is a case of wishful thinking. Or, maybe it has more to do with jobs. If unemployment is still incredibly high and stock market is only spinning its wheels with a 5% annual rate of return or less, then I don’ think that the America public will reelect the President.
Hank recently posted..A Selection Of Articles Written This Week
I’ll definitely be watching the possible Facebook IPO, and would be interested to see Apple offer a dividend.
I’m focused on paying off student loans so maybe 2013 I can enter the market.
I’m still worried that a Euro country will default….
John @ Married With Debt recently posted..Yakezie.com – Official Entry Post
John,
I can totally understand your concern about a Eurozone country default. Maybe the worst is over with respect to Europe’s financial crisis and any default will be fairly orderly.
Hank recently posted..A Selection Of Articles Written This Week