With mixed signals about the U.S. economy, a yo-yo stock market, a stagnant unemployment rate, new home sales surging to a record $1.1 million in December, and worries over a possible war with Iraq, it can be hard to tell what the future holds.
But blackenterprise.com readers have a pretty solid opinion about the stock market. Data from our stock market forecast poll, posted online from Jan. 14–28, 2003, indicated that an overwhelming 42% of readers do not foresee a sustained upturn in the stock market until at least 2005, while 28% predict an improvement by the third quarter of 2003, 16% in the fourth quarter, and 14% in 2004.
President George W. Bush’s $674 billion economic stimulus plan, unveiled Jan. 7, didn’t seem to help matters much. Fifty-six percent said the plan does not increase their confidence in the stock market, 32% say it’s too early to tell, and a paltry 12% are confident that it will help spur growth.
Findings from another poll revealed that although their outlook is grim, 39% of readers are still investing in the stock market. Warren Burgess III, financial services representative for First Investors Corp. in New York City, says, “Contrary to popular belief, this is a great opportunity to enter the stock market at a discount.” Forty-two percent of our readers have decided to keep cash on hand, which Burgess says is a “natural reaction to [uncertain] market conditions.” Finally, readers invested in real estate and bonds at a similar pace, 28% and 27%, respectively.
But Dick Grasso, chairman and CEO of the New York Stock Exchange, remains optimistic. He says, “Markets are driven by economic performance, [which] is growing, albeit not as fast as we would like.” As for the economic stimulus plan, he says it will not only be “a boost for the stock market [but also] for the overall economy.”