Goldman: This Selloff Is A Chance To Buy, Huge Gains Coming Still This Year

The recent deterioration in the global economy and the Euro do not have Goldman Sachs shaking in its boots.  Their analysts remain firmly in the bull camp and see the recent downturn as a buying opportunity.  They see the recent downturn as being orderly and consistent with past downturns in the beginning periods of recoveries:

“Developments over the past two weeks have not altered our fundamental view. The market has plunged 12% in four weeks, but remains 60% higher than in March 2009. The pull-back has been consistent with sell-offs that occurred in recoveries following bottoms in 1974, 1982, 1987, 1990 and 2002. The correction has been orderly in that sector returns have been exactly in-line with beta-adjusted expected performance.”

Goldman is still very bullish.  Their analysts believe the market could rally 21% by mid-year and will ultimately finish the year 17% higher:

“We expect the S&P 500 to rise to 1300 by mid-year (+21%), before ending 2010 at 1250 (+17%).”

Source: Goldman Sachs

This guest post previously appeared at the author’s blog, The Pragmatic Capitalist >

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