If you've been following our twice-weekly conversations at Strategic Tech Investor, you know that I'm very bullish about technology stocks.
But I want to let you in on a little secret …
I'm also bullish about the overall stock market.
In fact, I'm predicting that the Standard & Poor's 500 Index will advance 15% in 2014, rising from the current 1,795 to 2,065. That will not only take the closely watched index up through the psychologically important 2,000 level, it will take it to the highest level in history.
And that's the broad market index.
I believe that the tech sector could do even better.
So let's start with my stock market forecast 2014 – and conclude our talk by looking at an aggressive tech stock that I believe will trounce the market averages in the New Year.
The Zooming Markets
If you're getting nervous in the face of this historic market rally, I can certainly understand. Over the past five years, the S&P has gained 105%. The index is up nearly 23% so far this year.
But you can also have some confidence in my forecast.
Back on June 28 – a point at which tech-sector analysts and other market pundits were increasingly predicting that the rally in technology shares would end – I told you to expect a big second half of the year for tech stocks.
Since that time, the tech-focused Nasdaq Composite Index has zoomed 19.5% – versus 11.8% for the S&P.
What I'm telling you now is that the overall stock market should continue to surge in 2014.
If you drill down and look at the facts, there's simply no reason to let fear get the better of you. Signs that the economy – and the stock market – will remain healthy are everywhere.
Take what's happening with lumber. Prices recently hit a seven-month high of $378.30 per thousand board feet.
And there's a very good reason why demand for lumber is so strong. In fact, it's one of the three reasons I'm going to share with you that gives me such confidence that the American economy – and the stock market we keep score by – will continue to display muscle…
Housing Heats Up
Of all the factors that affect the economy and the stock market these days, the housing sector remains by far the most emotional.
Quite literally, it hits people right where they live.
If you happen to live in parts of Houston or Chicago – where real estate values are predicted to remain flat or slightly down this year – then national stats don't make you feel all that much better.
On the other hand, there's just no denying the impact that a strong national market for real estate can have on the economy.
When people buy new homes, they end up purchasing a lot of furnishings: refrigerators, dishwashers, security systems, furniture, and more. They also hire painters, designers, electricians, and carpenters.
Consider that construction employment totaled 5.83 million workers in October, an increase of 185,000 from a year earlier. The Associated General Contractors of America, a trade group, says that was the sector's highest jobs level since August 2009.
A look at the underlying numbers tells you why.
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.