The stock market bulls were out in force again in the latest Reuters poll of equity analysts and investors, conducted this week.
Taking the consensus at face value, further gains for stock markets look a sure-fire bet. However, their forecasts ought to be taken with a dose of common sense and a basic grasp of how the past has panned out.
Part of the reason for their optimism is simple herd mentality – that a positive view of the stock market will be mutually reinforcing.
And Thursday brought a pertinent reminder that sometimes reality cracks the market fervour. Shares fell sharply around the world after the U.S. Federal Reserve explicitly signaled it would start easing off its stimulus measures that have sent stocks rocketing over the last year.
Published on Tuesday, the latest Reuters poll collected more than 500 points of data from hundreds of analysts worldwide on how 20 of the world’s biggest stock markets will perform between now and the end of the year.