Portfolio Manager Perspectives

Jeff Benjamin

Eugene Peroni predicts Dow to hit 13,000

Fund manager sees more bull ahead, despite last week's market plunge

Jan 26, 2010 @ 11:23 am

By Jeff Benjamin

Despite recent stock market volatility, the bull market rally will likely last another year or more, according to Eugene Peroni Jr., a portfolio manager with Advisors Asset Management Inc.

Mr. Peroni is a multicap manager who uses technical analysis to make his investment decisions. Advisors Asset Management has $4 billion under supervision.

From his perspective, the current stock market run is comparable to the five-year period through October 2007, when the Dow Jones Industrial Average peaked after a 96% gain.

He expects a similar gain from the March 2009 low point, which would bring the Dow up to around 13,000, or about 27% above where it is now.

“That target range could be reached,” he said. “Even though last year was defined as a market crash, it could also have been described as a sharp, short-lived correction.”

Mr. Peroni's big-picture analysis defines the current market rally as the third and final stage of a “three-cycle bull market” that began in 1982. The first cycle ran up until a correction in October 1987. The second cycle went from 1988 through 2000 and the implosion of the technology bubble. That down market period was exacerbated by the September 2001 terrorist attacks. The final cycle began in 2002, according to Mr. Peroni.

“We're bullish over the intermediate term of the next one or two years,” he said. “But the next seven to 10 years after that could be difficult.”

Mr. Peron's bottom-up stock-picking strategy involves analyzing companies based on three broad characteristics: price chart patterns, net investment flow characteristics and relative strength.

“We need the support of both the stock and the sector, which is why we tend not to invest in stocks that are one-offs,” he said. “We want the sector tail wind.”

Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit InvestmentNews.com/pmperspectives .


What do you think?

View comments

Recommended for you

Featured video


These are the federal and state rules that will most impact 401(k) advisers

Will Hansen, chief governmental affairs officer for the National Association of Plan Advisors, discusses regulation and legislation poised to have the biggest impact on advisers.

Latest news & opinion

Social Security funding outlook improves slightly

Retirement reserves extended one year; disability fund by 20 years

IBD report: Another impressive year

Despite a stock market decline, revenue is up. And the streak isn't expected to end anytime soon.

IBDs with the most CFPs

How many of the more than 83,000 certified financial planners are employed by the big independent broker-dealers?

Richard Thaler wants to use 401(k)s to boost Social Security payments

The Nobel laureate wants to simplify drawing down retirement assets, which he thinks is 'way harder' than saving the money.

InvestmentNews announces 2019 Innovation Awards winners

Sheryl Garrett is this year's InvestmentNews Icon.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print