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.