donald trump made fools of the pollsters and election prognosticators. his victory might make another group with an even worse track record look smart. leading up to the election, the year-end stock market predictions for wall street<u+2019>s strategists were on track for being wrong yet again. the stock market was down for nine days in a row with little to get it rising again during the mediocre earnings season. the median s&p 500 year-end forecast among 19 equity strategists is 2175, with targets ranging from 2000 to 2300. the trump rally put the index right at 2175 on thursday afternoon. if the rally continues, mr. trump could do the nearly impossible<u+2014>make the perennially optimistic strategists actually underestimate the market . and while many incorrectly said a trump victory would spark a short-term selloff, their longer-term prognostications remain on course. the hope is economic growth will pick up, inflation will rise and bond yields will hold at higher levels. while plenty can happen in the final seven weeks of the year, it is unusual for wall street strategists to get their year-end targets so right. from 2000 through 2015, the s&p 500 returned a 4% average annual gain , excluding dividends. by comparison, wall street strategists predicted 10% yearly returns on average across that span, according to research firm birinyi associates. there is evidence beyond the election that the strategists could end up underestimating the market. even before the election, sentiment among individual investors appeared to be rising after being unusually sour for much of the past year. a weekly survey from the american association of individual investors on thursday showed the percentage of investors who say they are bullish surged to 39% from 24% a week earlier. that marked the biggest increase since july 2010 and the highest percentage of the year. the poll is administered each week from thursday through wednesday. aaii said roughly four-fifths of its most-recent results were recorded before the election. this week was the first time bullish sentiment exceeded aaii<u+2019>s historical average in 53 weeks. the reputation of pollsters was badly damaged by the election. strategists have a far worse track record of predicting the future. even if they get it right this year, their reputation won<u+2019>t likely improve.
donald trump is actually making wall street strategists look smart  - wsj
steven russolillo