http://www.latimes.com/business/la-fi-petruno1aug01.story MARKET BEAT
Investors Struggle During a Time of No Returns
Tom Petruno
August 1, 2004
This is becoming the year of no returns in financial markets.
The blue-chip Standard & Poor's 500 stock index's return is exactly flat year-to-date, counting dividend income.
The average domestic stock mutual fund is down 1%, according to Morningstar Inc.<snip>
Gold? It's down 6% this year. <snip>
If it finishes the year at 1,150 (the target of the Standard & Poor's investment policy committee) , the S&P's price gain for the 12 months would be 3.4%. At 1,190 it would be up 7%. Add about 1.7 percentage points for dividend income for the potential total return.<snip>
If the Fed lifts its rate a quarter of a percentage point at every meeting between now and next July (a strong possibility, many economists say), it would stand at 3.25% a year from now....(the 10-year T-note yield might reach between 5.5% and 6% by the end of 2005)<snip>
The S&P 500 index now is priced at about 16 times estimated earnings over the next 12 months, according to S&P's own estimates. Many market veterans don't consider that to be an expensive price-to-earnings ratio, but neither do most consider it to be a real bargain.<snip>