Around the first of the year there is always a bunch of talk about where the market is headed in the coming year. It doesn’t really have much bearing on whether your individual stock selections are good investments or not, but it gives people the opportunity to guess at the market’s direction.

I have been reading a lot of articles that say we are in for another good year. I don’t agree. I think the market will end the year essentially where it began or down on the year. If the market is up on the year I don’t see it being up very much. The Dow was up over sixteen percent last year and most of that run came in the second half of the year. The Nasdaq also made a run of over seventeen percent (from its lows) in the second half of the year. I think the markets have gotten ahead of themselves and they need to take a breather. (more…)