Savita Subramanian looked overly optimistic when she picked her 2013 stock market price target last year—and pessimistic now that she's holding to that prediction.
Nevertheless, the Bank of America Merrill Lynch strategist hasn't cared to join the heavily populated bull stampede on Wall Street, as firms including Goldman Sachs and JPMorgan Chase have issued huge upward revisions on their targets.
"We've gone from being out-of-consensus bulls from the end of last year to out-of-consensus bears by the middle of this year, without having changed our outlook on the market at all," Subramanian said Wednesday at the firm's second-half outlook media briefing.
"We all know this is hardly an exact science," she said. "I would argue the market looks fairly valued, but we could see further upside over the next 12 months."
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Despite the possibility for more upside, Subramanian said she believes the more likely case is that the market has seen its high point for the year and will drift around for the next six months, with investors looking for individual sector plays rather than broad market bets.
Subramanian and the rest of the BofA team—a highly accurate and well-decorated group by those who keep track of forecasts—slapped a 1,600 target on the Standard & Poor's 500 last year.
For a while, it looked like a low-ball prediction.
Fanned by a storm of central bank liquidity, the stock index zoomed all the way to a 1,669 closing before taking a volatile trip down, now nearing that 1,600 bull's-eye.
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The forecast was part of the view that a "Great Rotation" was about to occur, with money flowing from bonds into stocks and changing the investment landscape.
While the part about cash going into stocks has proved accurate, it's been less apparent that the flow is from bonds.
Still, the BofA strategists said, there definitely has been rotation of money this year among investment choices, and they expect that to continue.