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Stocks Are Headed Even Higher: Michael Holland

Daily Ticker
Stocks Are Headed Even Higher: Michael Holland

Investors certainly have something to be thankful for this Thanksgiving.

Markets are trading at all-time highs with the Dow Jones Industrial Average (^DJI) trading above 16,000 and the S&P 500 (^GSPC) at more than 1,800.

But where can stocks go from here?

Related: No Fed Taper but No Market Bubbles Either: Jefferies' Ward McCarthy

"All things being equal, an accommodative Fed means stocks are going higher," says Michael Holland, chairman of Holland & Company, a private investment firm. "Ben Bernanke and Janet Yellen are telling us they are probably still likely to go up and that's the right bet right now."

That said, there is more to this story, he says, noting a lack of headwinds during this period of Fed accommodation is also helping to boost stocks. Europe, Japan and now Iran are less of a threat today than they were 6-12 months ago, he notes.

To his point, the prospect of a deal with Iran boosted the Nasdaq (^IXIC) to 4,000 Thursday for the first time in 13 years.

Related: Don't Expect a Big Payoff from the Western Deal with Iran

However, the lack of tailwinds from positive U.S. economic data cannot be ignored. Holland says that if lackluster U.S. economic data persists, the uptick in stock prices cannot go on forever.

Bottom line: "I think what you have to do in these markets, as we've learned since 2008, is be prepared for good surprises as well as bad surprises," he says.

Tell us what you think in the comment section below! Where will stocks end 2013?

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