Abby Joseph Cohen and Gabrielle Napolitano, managing directors at Goldman Sachs, recommend an asset allocation for 2002 of 75% equities, 22% bonds and 3% commodities, their most bullish recommendation ever for their model portfolio. They forecast the S&P 500 will end 2002 in the range of 1,300 to 1,425, returning "at least 10% to 12% and possibly more than 20% for the year.
For the S&P 500 benchmark sectors, they recommend overweighting energy, financial services, industrials and information technology, and underweighting consumer staples, health care, telecom services and utilities. They "believe that the black-hole economic forecasts are not well supported.
Their worries for 2002 include lethargic economic activity in other major industrialized countries and "concerns about the unknown, including additional acts of terrorism and higher energy prices.