• Three reasons why the Dow is going up.

• Insights from Jeremy Siegel.

• Why the Dow 10,000 in 2009 isn't crazy.

• The Fed. Bernanke and the Federal Reserve are pulling out all the stops to stimulate the economy. Since September 2008, the money supply (M2) has been growing at an incredible 13% rate, one of the highest in the post-World War II period.

• Mortgage support. The Obama administration has been working hard at bailing out all the unstable banks, bad mortgages and bad assets in the economy through massive deficit spending. Essentially, the government policy is putting a floor under the residential real estate market, which will keep it from collapsing any further.

• History sides with the bulls. Last month, I had dinner with Jeremy Siegel, professor of economics at the Wharton School and author of the bestseller "Stocks for the Long Run." He is a firm believer in looking at historical trends, something that many investors and Wall Street analysts have forgotten. And right now, the trend favors the bulls.

Well, guess what? The lag is over, and the "Friedman Effect" is taking full effect. We can expect higher stock prices and a recovery in the economy by year-end. And as a result of the administration's efforts, housing sales are on the rise and real estate prices are stabilizing.

It's why I'm so interested in real estate lately. Take a look at may last column, "Real Estate: The Buy of the Century."

http://www.investmentu.com/IUEL/2009/April/buying-real-estate.html

Adding more fuel to my position, when I sat down with Wharton's Wizard he showed me an interesting long-term chart of the S&P 500 Index.



The Wizard of Wharton's Long-Term Outlook

You'll note that every time the market hit the bottom of his long-term chart, it rallied - sharply. And that's exactly where it was in late February when I met with Professor Siegel - at the bottom.

Sure enough, in early March Wall Street rallied - and it hasn't looked back. It's now up 30% from its lows. Between you and me, he called the exact bottom of the stock market within weeks. (Of course, so did a few of our analysts as well.)

How far up can it go? I asked this precise question to Professor Siegel last month.

He told me that he has just completed a study of how well stocks do after a major crash like the one we just experienced (falling 50% from its highs). His conclusion was pretty striking: After a major bear market, stocks on average rebound 24% the first year of recovery. And just as nice, the average annual return over the next five years is 18%.

Since the Dow was around 8,300 at the first of the year, it could climb back to 10,000 by year-end. (And 18,000 by 2013.) We could comfortably hit these numbers with an additional 19% gain.

Although many believe the "easy money" has been made - and they may be right - the market will still offer plenty of profitable opportunities in the coming months. It'll be volatile, but it's certainly not too late to get aboard.

Good investing,

Mark 

I really do not understand the relationship a person dead relationship to an earthquake. If is got to do with feng shui or God will that cant be explain it should be a good thing. China is now booming and everyone is happy. Let's look forward, history need true facts. Thanks. 

heresay can go science centre and see, they got equiment, if you are interested,

but i rather see my counter and eclipse my shadow over them and make sure they cheong..hehehehe

dealer0168      ( Date: 21-Jul-2009 19:07) Posted: Singapore can see the eclipse meh? Sure? boyikao3      ( Date: 21-Jul-2009 18:36) Posted: aiyah, how i know? maybe solar eclipse only a warning mah. u think sure crash meh?but they say this is the longest solar eclipse lor, and its over india and china - 2 of the major economic powerhouse. so maybe has some meaning behind lah. anyway, victorf is quite accurate in his calculation. my analysis of the next correction is around mid to end august, much earlier than september or october.   remember to wear sunglass to stare at the eclipse 2morrow everyone!