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Bold financial predictions for 2012: Part One

moneylogo040411_optBY WARREN BOROSON
NEWJERSEYNEWSROOM.COM
BOROSON ON MONEY

Brian Kazanchy thinks that Mitt Romney will be our new President, that the Standard & Poor’s 500 Stock Index will rise 12 percent this year, and that Microsoft stock seems to be a good buy.

Kazanchy is chairman of the investment committee at RegentAtlantic in Morristown, one of the largest financial planning firms in New Jersey -- if not the largest. He is a Chartered Financial Analyst and a Certified Financial Planner, and holds an MBA with a concentration in finance from Fairleigh Dickinson University and a BA in finance from the University of Richmond. He studied abroad at the University of Warwick in Coventry, England.

His answers (not necessarily RegentAtlantic’s answers) to a series of questions:

NJNR: How far up (or down) with the S&P 500 be in 2012?

KAZANCHY: Up 12 percent. This year is expected to see a lot of volatility. However, if meaningful progress is made in Europe, the market will be poised to accelerate from its cheap valuations.

NJNR: What industry or industries should do well?

KAZANCHY: Technology. With a forward price-earnings ratio of 12 times earnings, this sector is cheap. Businesses in general are also flush with cash, and will need to catch up on capital spending after years of containing costs.

NJNR: What industry or industries might do poorly? kazanchyBrian031711_opt

KAZANCHY: Utilities. This is the only sector in the S&P 500 where the forward P/E ratio, 14.6 times, is higher than its 15-year average forward P/E of 12.3 times. As a yield-oriented investment, it has been overbought.

NJNR: Will residential real estate revive?

KAZANCHY: Residential real estate is undergoing a multi-year bottoming-out process. However, we expect some improving news about home sales this year. House prices should be ready to rise by 2013 after minor declines this year.

NJNR: Which particular mutual funds might do well in 2012? And why?

KAZANCHY: Schwab U.S. Fundamental Index (SFLNX). Reason: U.S. large cap stocks are trading at inexpensive valuations, have strong competitive positions, and solid balance sheets.



 
Comments (1)
1 Monday, 16 January 2012 14:33
mrdirt
Will depend on War with Iran, European Debt, US Debt, Price of Oil,
Unemployment U6 not U3 and the number plus the 4 million who fell of the rolls.

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