They called it.
Two local investment advisers interviewed by The World-Herald last December correctly predicted that the Dow Jones industrial average would hit 16,000 this year.
The Dow closed above 16,000 for the first time Thursday, and climbed higher Friday to close at 16,064.77.
Jeff Sharp of SilverStone Asset Management and Brian Kirkpatrick of Bridges Investment Management correctly predicted the 16,000 benchmark, while six others were more conservative, with one predicting an annual high as low as 14,200.
“At the time, the number seemed pretty big, but it didn't seem like we were going out on a limb,” said Kirkpatrick, who said colleagues have teased him this week about his “crystal ball.”
“It was just the price needing to catch up with the earnings estimates at the beginning of the year,” he said.
Sharp also saw more value in the markets: “There was so much cash on corporate balance sheets at the time, and those companies were going to reinvest.”
He said the 16,000 mark came as a surprise to some skeptics, but investors have turned to equity markets because of a lack of good alternatives.
Both Sharp and Kirkpatrick said the Dow will not grow as much in 2014.
“Valuations have caught up,” Kirkpatrick said. He still expects a good year and advises investing in equities over bonds.
Sharp said the market will be “choppy” in the first half of the year as investors interpret the Federal Reserve's plans on a reduced pace for bond buying, before growing again. He's already making a prediction that by the end of 2014, the Dow will be around 17,500.