The Dow Jones Industrial Average clung to minor gains this morning after closing Thursday for the first time in history above the 16,000 mark.
The blue-chip index was up 19 points to 16,029 this morning.
Dave Spano, president and chief executive officer of Annex Wealth Management in Elm Grove, said, “I think that the market is fairly valued at where it is today. It clearly is not as cheap as it was in the depths of the recession in March of ’09, but today it’s fairly valued by a formal matrix, that is the price to earnings ratio.”
For the market to go up from here, companies in the S&P 500 would have to earn more, Spano said. As long as the Federal Reserve Board continues to have an “easy” money policy, the stock market is at a fair valuation, investor confidence remains high, the economy is not in a recession and gross domestic product growth remains positive, the market can continue to grow unhindered, Spano said.
Spano is advising clients to shorten maturities on bond portfolios and buy good quality stocks.
“Right now, we still think that being long bonds…that does represent a risk because at some point interest rates are going to rise, which is going to drive bond prices down,” Spano said.