My Case For the Dow to Crest 20,000; S&P 2220

1. "Obamacare" aka, the Affordable Care Act was written by insurance companies, whos' board members serve on countless other corporate boards. The purpose of this law is to get companies out of the insurance obligation. This cost savings for corporations will go right to the bottom line and corporate balance sheets will improve without having to sell any additional widgets. In 5 years there will be no employer sponsored plans left and we will be well on our way to the single payer system.

2. The 10 year US treasury note will struggle to break 2.75% over the next 3 to 5 years. Investors will be forced into stocks world wide, but particularly US equities, simply because they are perceived to be safer than emerging stock indexes. Solid dividend payers will be in high demand driving down dividend yields across the board. Stocks will continue to be the only pig with lipstick over the next 3-5 years.

3. World wide central bank largess will continue indefinately. Dilution of currencies will continue well into the near future with the European central bank (ECB) getting into the act to bring the Euro closer to parity with the US dollar. I think the Euro will go to around $1.12 over the next year or so. Dilution of the money supply is just like dilution of shares; it raises money for the issuer and the shareholder loses out. Inflation will become a factor after the party ends in a couple of years and it could get ugly world wide.

4. Technological advances and clean energy revolution. Whenever old industries die and new ones are born, money that has been in blue chips that have increased for decades starts to rotate into new companies many of which are listed in the Russell 2000 index, which we have also seen power to new highs. This rotation into smaller companies will drive the market over the next 3-5 years

So why does this matter to anyone? If you are exposed to stocks through a retirement account then you win, If you are afraid of stocks and don't even own mutual funds or ETF's then you will not benefit at all.