Stocks Could Rise 20% by Next Summer

Despite the volatility seen in recent months, the bull market still has room left for growth, according to Scott Minerd, chairman of investments and global chief investment officer of Guggenheim Partners, an investment firm that manages $220 billion in assets. "History shows us that in the period leading up to Fed tightening ... we often get returns in excess of 10%, sometimes 20%," he said. "Layer into that, 2016 is an election year and election years are notoriously good for stocks." Overall, Minerd figures there's a good chance stocks could increase 15% to 20% by the summer of 2016.

Higher stock prices come with a cost, however -- volatility. Minerd attributes much of the recent market swings to the uncertainty over when the Federal Reserve will undertake its first rate hike since 2006. "I think volatility is here to stay in terms of the market trying to come to grips with when the Fed is going to move." Minerd expects the central bank to push rates higher in September, after previously maintaining a 2016 timeline for an increase.

Source: The Street

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