Market Downturn "Healthy" For 2007 Says SB's Manley
Smith Barney’s market strategist for private clients told CNBC’s “Closing Bell” that last week’s market downturn was healthy and he expects 2007 to be a strong year. “We didn’t see anything that changed our opinion,” said John Manley. “This sort of stuff has to happen from time-to-time because it clears out the tubes and re-adjusts the economy.”
Manley said the sharp market downturn and quick rebound limited the damage.
“The faster is happens, the less drastic it has to be – and this happened pretty fast,” Manley said. “…The fact that we reacted so quickly I think ultimately keeps it on the straight and narrow.” Manley said there have been about 50 days since 1961 when the market lost 3% or more, but the market has always made up the losses and gained new ground.
“The average return six months out is double what the average six-month return is – 9 % vs. 4% and change,” Manley said.
He said Smith Barney did some selling for its private clients and noted that individual investors didn’t panic during the downturn.