A number of the Street's most closely followed investment strategists came out Tuesday and said it was time to put more money to work in the market.
Donaldson Lufkin & Jenrette
chief investment strategist Tom Galvin upped his 1999 target for the
Dow Jones Industrial Average
to 11,900 from 11,000. Going a step further,
technician Ralph Acampora raised his long-term Dow target to 12,500 to 13,000.
Salomon Smith Barney's
John Manley said that stocks looked set to keep rolling higher.
While all that was happening, though,
Morgan Stanley Dean Witter
chief U.S. investment strategist
went on his firm's squawk box to tell clients that he was raising cash in his model portfolio to 20% from 15%.
Wien's model, which cues off of bond yields, has shown stocks overvalued by more than 30% for some time. Now he worries not only that the stock market is expensive relative to bond yields, but that bonds may be expensive relative to where they should be.
"The market," says Wien, "is fixated on the idea that the
is not going to tighten anymore" -- an idea he disagrees with.
For Wien, the market's contour looks uncomfortably like it did last year, when a July rally put a top on stocks that wouldn't get cleared until late December.
This is not to say that he thinks the market will torment investors again as it did last year. Rather, as valuations get richer and richer, the chances of the market's selling off increase, while fresh gains look more and more limited.
That doesn't mean the market won't go higher -- after all, Wien points out, look at what the market has done since late February, when he raised his cash position to 15% from 10%. It simply means that the possibility of the market booking further gains is looking more and more like boxcars.
"As the market goes higher, the probabilities change," says Wien. "You have to respect that. I think it's vulnerable."