Guggenheim’s Scott Minerd Sees Chance of S&P Falling as Low as 1,200

My Comments: With so many variables to think about, anyone with limited financial literacy is going to be confused. How old are you now? Have you developed a strategic plan for your financial future? Is there a retirement in your future? Do you listen to stock picking mavens for guidance? Are you financially sophisticated enough to make smart investment choices? Are you investing with before-tax money or after-tax money? The list goes on.

If you’re relatively young and have the discipline to set aside money now to preserve your financial well being in the future, and are adding to your pile of money every month, then seeing the S&P 500 drop to 1200 is fairly meaningless.

If you’re 10 years away from your projected retirement date, it’s far more meaningful but not necessarily a game changer. If you have the needed skills, and the ability to make adjustments, then seeing it drop to 1200 creates some opportunities for you. If you have someone you can trust to help you who has financial skills and is also a fiduciary, do what they tell you to do.

If you’re already retired and you discover the pile of money you’ve created to help you pay your bills for the next 20 years is now in the toilet, you need to really pay attention. How this will all play our is anyone’s guess. But it will play out and if you want to avoid severe financial pain, you need to pay attention.

by Sonali Basak \ 17 APR 2020 \

Scott Minerd, the chief investment officer of Guggenheim Investments, said gains in the S&P 500 are unsustainable and the stock benchmark could fall as low as 1,200 when it retreats.

“Investors who are sitting out there right now who rebalanced a few weeks ago and moved from fixed income to equities should probably think about rebalancing again,” he said Friday on a panel. “It could be 1,500, 1,600, 1,200.”

The S&P 500 stood at 2,843 at 12:17 p.m. Friday in New York, down about 12% this year. Minerd’s opinion diverges from the views at Goldman Sachs Group Inc. and of Morgan Stanley Chief Executive Officer James Gorman.

Gorman said it’s unlikely that the market hits new lows. He sees the S&P 500 at 2,850 in the near term, then heading lower, he said on the panel hosted by the United Nations Office for Partnerships and the nonprofit Goal 17.

“The market at this level based upon where earnings are doesn’t represent any kind of intrinsic value,” Minerd said. “It is being entirely propped up by liquidity.”

The Guggenheim investor said there could be rolling shutdowns for the next two years, preventing a full-scale return to work, and that U.S. unemployment could reach as high as 17%. More than 20 million jobs have been lost in the last four weeks.

“It’s going to be a long haul to get back to the unemployment levels we saw prior to the downturn,” Minerd said. “That’s why I’m so concerned about a longer-term plan to encourage business to get people back to work.”

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