Many people are expressing disappointment in the Fed's half-point cut Tuesday but one analyst is staying positive.
Last year, when the market was skyrocketing, James Glassman wrote Dow 36,000 — and despite the markets being in the dumps, he says the Dow hitting 36,000 is still a good bet. Neil Cavuto asked him when it might happen on Your World.
Q: Still sticking to it huh?
Glassman: Yes we think all investors should look at their portfolios and say— what's changed? We did that and when we looked at the economy our conclusion was not only have things not changed for the long term, but in fact, they have gotten better than they were two years ago.
Q: But many are saying the economy is slowing down?
Glassman: Well certainly the economy is slowing down in the short term but we say in our book there will be corrections in the short-term markets. Nobody said, the business cycle has been repealed, there will be a slowdown and there is one.
Q: When does the Dow 36,000 happen?
Glassman: We say in our book that we don't have a crystal ball. It could be ten weeks or ten years. In the end, we make a guess at five years. We're sticking with that guess. But I think it's very important for people to understand that the basic message of our book is you ought to be in the stock market with diversified portfolios holding long term. It doesn't really matter whether it is one year, two years, three years or ten years, if the market continues to rise and we think it will.
Q: So what could get in the way of this prediction? What would happen to make you say I goofed?
Glassman: A couple of things. First, we have to see the economy deteriorating. It would have to turn down significantly over a long term period. We don't think that's going to happen. Looking long term over the next ten years not only will there be growth but it is going to be as good as we thought it was in 96 or 98. It is actually much better
Q: So you could live with a couple of quarters of say zero growth or maybe even recessionary numbers?
Glassman: Absolutely, Nobody has ever said to my knowledge that the business cycle has been repealed. We certainly haven't. It's average growth that counts.
Certainly, the economy will go up and down. But we need a tax cut and certainly less government meddling and antitrust against Microsoft and so forth. That's another group of things I'm worried about. But overall, we're sticking to our predictions. I think people ought to feel comfortable being in the stock market. It goes up, it goes down. But over the long-term it goes up.
Neil Cavuto serves as senior vice president, anchor and managing editor for both FOX News Channel (FNC) and FOX Business Network (FBN). He is anchor of FNC's Your World with Cavuto - the number one rated cable news program for the 4 p.m. timeslot - as well as the FNC Saturday show Cavuto on Business. He also hosts Cavuto on FBN weeknights at 8 p.m. In addition to anchoring daily programs and breaking news specials on FNC and FBN, Cavuto oversees business news content for both networks and FNC's weekend business shows, including Bulls & Bears, Forbes on Fox, and Cashin' In. Click here for more on Neil Cavuto.