Over the past week you have been conducting security-level analysis in creating your 5 stock portfolios. Today, 1/17, the Dow Jones closed at a record high of 29,348 points. Many investors are predicting/hoping for a 35,000 point Dow by the end of 2020. In contrast, other investors are more bearish. One such investor, Michael Burry, is pessimistic, arguing in the article below that all of the capital that has moved into index fund investing has promoted passive investing which has removed price discovery from the equity markets.
1) Provide your opinion on where the Dow Jones Index will be at one month prior to the 2020 Presidential election (the outcome of which could have an impact on stock market performance).
2) How does your market forecast affect your 5 stock portfolio and any prospective changes that you would make if our investment project was running until one month prior to the election?
3) Do you agree or disagree with Burry’s opinion on passive investing/index funds ( they reduce security analysis and will cause a crash in the equity/debt markets ) ?