S&P 500’s new high suggests further gains to above 2,400 is likely in a year, BofA Merrill Lynch analysts said
by Tomi Kilgore
Contrary to popular opinion, the S&P 500’s recent breakout to new highs should embolden investors, not scare them, analysts at Bank of America Merrill Lynch said.
The S&P 500 index SPX, +0.34% closed Friday at a 52-week high for the first time in 414 calendar days. On Monday, it climbed 0.3% to a fresh record close of 2,137.16. It has run up 17% since closing at a 22-month low of 1,829.08 on Feb. 11.
Some investors may be hesitant to buy stocks after such a sharp rally, for fear of being the last to jump on a crowded bandwagon. The old Wall Street adage is buy low and sell high.
But the B.of A. Merrill Lynch research report makes the opposite case, saying now is the time for investors to buy high, so they could sell higher. History suggests the S&P 500 is likely to be above 2,400 a year from now, the firm said.