Greatest market forecast ever might keep you calm for 2023

From a stock market and investment perspective, 2022 was awful. Depending on whose projections and forecasts you believe, the new year could well be worse.

At times like these, I like to revert to what I consider the greatest — and wildest — stock market forecast of all time, one that appears to be coming true even if it’s a long way from the finish line.

It goes like this: Dow 116,200.

It’s not my prediction. It was made by Bill Berger, founder of the Berger Funds, which merged into the Janus funds in 2002. And if it sounds completely far-fetched with the Dow Jones Industrial Average standing at roughly 33,000 and down about 8.5% for 2022, consider that Berger made his prognostication in 1995 with the index hovering around 4,500.

He said the Dow would reach his target number in 45 years, in the fall of 2040.

The reason to keep Berger’s forecast alive, which I have been on a mission to do since hearing his speech in Boston at the first Society of American Business Editors and Writers Conference on Personal Finance, is because in crazy times like these, that zany forecast might help keep you sane.

That’s because as impossible as Dow 116,200 sounds, it’s completely realistic over the next 18 years.

Berger divined his number simply. By the time of that speech, he had worked in investments for 45 years; when he got started, the Dow was below 200.

Mathematically, he saw the Dow’s future as reflecting the past; repeating the growth he’d lived through would push the benchmark to 116,200 over the next 45 years.

A septuagenarian at the time, Berger wryly suggested that if he was proved wrong, people come find him to discuss it; he died a few years later.

As lofty as Berger’s number was (and is), Morningstar calculates that hitting the target would have required an annualized gain of roughly 7.35% over the 45 years.

When the Dow peaked Jan. 4, 2022, the necessary gain was down to 6.33% annualized.

As of Dec. 1, after a year of market woes, Morningstar calculates that hitting 116,200 in the fall of 2040 will take a 7.07% annualized gain, which feels like a safe bet. Few observers believe the market will deliver less than that over the next two decades.

Thus, 2022’s disappointments haven’t derailed long-term investors any more than they’ve crashed the greatest-ever market forecast.

Keep that in mind with whatever the market dishes out next, because while it might get ugly, you can be pretty sure that I’m going to keep betting on the Dow to be close to 116,200 by late 2040.

I’ll be a septuagenarian then myself, and one thing I won’t be doing at that time is writing this column.

Today marks the end of my run as a syndicated columnist. My work went into syndication — meaning it was picked up by papers around the country — at the start of 1995, when I was a personal finance and mutual funds columnist at The Boston Globe. It has remained in syndication without missing so much as a single week ever since.

My job isn’t changing much, just where you can find me. My weekday podcast about all things financial, Money Life with Chuck Jaffe, is continuing, and I will be taking my columns back to MarketWatch.com, where I was on staff for about 15 years after leaving the Globe.

My work there will focus a little more on investments and financial opinion and a bit less on personal finance.

And as much as I’d love it if you follow me there and listen to the show (moneylifeshow.com), it’s more important to me that you keep reading this newspaper, supporting quality journalism in your neighborhood.

My success story is due largely to papers like The Seattle Times, which bought my column years ago, picking me over better-known names from big syndicates because they liked the tone and tenor of my work, and for sticking with me for years when most newspapers were cutting every shred of content that wasn’t local, even if that left a void in areas like personal finance.

As my youngest daughter gets married this week — she was not even a year old when I joined the Globe — I get a kick out of the idea that revenue from the Times and others went a long way toward paying for her wedding, my kids’ educations and more.

I’d like to thank you, the dedicated readers who have stuck with me for so long, who have set me straight when I needed it, and sent me an “Attaboy” or an “Amen, brother” when you felt I struck your chord.

I recently got a letter from a young man who said his father introduced him to my work as a teenager, and he was now implementing some of my advice as he starts his own family. I’m not sure I have ever received higher praise.

I hope you stuck around and read all these years because my work helped you. Thank you for taking me into your home and spending some time with me. It has been my honor and privilege.

Please, stay on the lookout for high-quality, well-informed financial journalism. Keep your guard up, and your eye out for conflicts of interest, misguided concepts and bad actors. Stay safe; be well.

And remember, when the market goes down and all looks bleak, there’s  still Dow 116,200 to look forward to.