For the second straight year, the stock market's mediocre returns didn't match the expectations of our panel of local investment advisers.
While the eight advisers we queried last year expected gains of 8 percent for the Dow Jones industrial average and 9 percent for the Nasdaq Composite Index, those forecasts fell far short of the market's lackluster returns. Heading into the final week of trading, the Dow is up just 1 percent for the year, while the Nasdaq has gained 5 percent.
Bragging rights for the best Dow forecast goes to James P. Julian, a partner at Amherst money manager Robshaw & Julian, whose prediction of 11,260 for the Dow was the most downbeat of all our predictions for the index. But even that was off by more than 375 points heading into the final week of trading, with the Dow at 10,883. His Nasdaq prediction was 2,310, still too high for an index that closed the week at 2,249.
Honors for the best Nasdaq forecast go to Rosemary A. Ligotti, senior vice president at Cantella & Co. in Buffalo, with her forecast of 2,300. Her Dow forecast of 11,400 was second best.
For the second straight year, no one came close to putting together a better package of five stocks than Anthony J. Ogorek, who runs Ogorek Wealth Management in Amherst. His stock picks gained an average of 27.1 percent, nearly double the gains of any other adviser's picks and far outpacing gains of all of the major indexes. His 2004 picks gained an average of 26.7 percent.
Ogorek's success was due to his belief that energy prices would stay high. His top pick, oil and natural gas driller XTO Energy, soared by 76 percent, while ExxonMobil gained 11 percent. Ogorek also hit paydirt with the 50 percent surge in Commercial Metals stock, which offset small declines by Home Depot and L-3 Communications.
Overall, the local advisers' picks matched the market's lackluster results, rising by an average of just 4.3 percent, which topped the Dow and roughly matched the Nasdaq. Here's a look back at the other advisers' predictions for the Dow and the Nasdaq:
* Ogorek, Dow: 11,422; Nasdaq: 2,312.
* Francis G. Leonard, Dow: 11,500; Nasdaq: 2,350.
* Gerald T. Cole, Dow: 12,000; Nasdaq: 2,500.
* Thomas S. Quealy Jr., Dow: 11,875; Nasdaq: 2,425.
* Peter Aleksandrowicz, principal, Aleksandrowicz & Associates, Dow: 12,500; Nasdaq: 2,400.
* Joseph Curatolo, Dow: 11,775; Nasdaq: 2,350.