Stock Market Forecast 2006
Between November 1987 and January 1995, the Dow Jones Industrial Average increased at an annual rate of 10.9%. After the recent decline, the DJIA grew at an annual rate of 10.1% between January 1995 and May 2003. Is 10.9% a reasonable estimate of long run growth absent speculative bubbles?
The blue line shows these historical growth rates and the forecast through 2012, assuming that the DJIA grows at an annual rate of 10.9% from May 2003 onward. At that rate, it will take until May 2006 to return to the peak reached in December 1999.
PS: This forecast missed by only a few months. It took until October 3, 2006 for the DJIA to close at a new high.
