Is a bull market a good time to invest?
Investing in bull and bear markets
A better strategy, then, is to invest now and stay focused on the long term. Whether this new bull market will continue or another downturn is looming, stock prices will bounce back eventually.
For example, I have already explained that a new bull market became official when the S&P 500 hit a new record high on Jan. 19, 2024. But the bull market actually started 15 months earlier when the S&P 500 reached its bear-market low on Oct. 12, 2022.
History says no. Based on the stock market's historic performance, there's never necessarily a bad time to buy -- as long as you keep a long-term outlook. The market can be volatile in the short term (even in strong economic times), but it has a perfect track record of seeing positive returns over many years.
“This new bull market can last for another seven to nine years, as AI is expected to drive significant productivity gains for companies across the board, which will strengthen corporate earnings.”
The market sees a greater than 80% chance of at least five rate cuts from current levels by the end of 2024. Investor optimism about the economic outlook has improved dramatically from a year ago, but there's still a risk that Fed policy tightening could tip the economy into a recession in 2024.
Wall Street analysts' consensus estimates predict 3.6% earnings growth and 3.5% revenue growth for S&P 500 companies in the first quarter. Analysts project full-year S&P 500 earnings growth of 11.0% in 2024, but analysts are more optimistic about some market sectors than others.
Key takeaways
Expectations of an earnings rebound in 2024 suggest earnings could continue to drive the market higher. While some valuations are stretched, there is still room for the market to grow if earnings estimates are met.
Stock Market Forecast 2024: Wall Street Price Targets
Growth is expected to improve in 2024. Analysts are calling for year-over-year earnings growth of 11.5%, Butters says.
Key Takeaways:
The 100-minus-your-age long-term savings rule is designed to guard against investment risk in retirement. If you're 60, you should only have 40% of your retirement portfolio in stocks, with the rest in bonds, money market accounts and cash.
Should I stop investing right now?
While it's generally safe to invest at any time (even during bear markets), there are a couple of situations where it could be risky. When you invest, it's best to keep your money in the market for at least several years -- if not decades.
- Cisco Systems Inc. (ticker: CSCO)
- Comcast Corp. (CMCSA)
- Telus Corp. (TU)
- Unilever PLC (UL)
- Sony Group Corp. (SONY)
- Toronto-Dominion Bank (TD)
- Solventum Corp. (SOLV)
- Essential Utilities Inc. (WTRG)
The London-based research firm forecasted that the S & P 500 could close this year at 5,500 — slightly above consensus — before charging ahead to hit 6,500 by the end of 2025, citing the valuation trajectory during the dot-com bubble in the late 1990s. .SPX 1Y line “The bubble in the S & P 500 that is forming now ...
Economic downturn or recession
However, economic indicators can change, and if there are signs of an economic downturn or recession, it can trigger a reversal in market sentiment. Factors such as slowing economic growth, rising inflation, or geopolitical tensions can contribute to the end of a bull run.
The stock market has been surging over the past year, with the S&P 500 (SNPINDEX: ^GSPC) up by more than 45% from its lowest point in late 2022. We're now well into bull market territory, and stock prices don't seem to be slowing down.
A New Bull Market Has Begun, but It's Not Too Late to Buy This Unstoppable Artificial Intelligence (AI) Stock. The S&P 500 index bottomed in October 2022 following a 10-month slide that culminated in a technical bear market.
Diversify. When dividend reinvestment is included, S&P increased by 26.44% in 2024, adding more than 2% to the market return for the year. No matter how optimistic you may be going forward, another decline in 2023 can't be ruled out. Dividends are one of the best protections against volatility in the stock market.
"2024 is bound to be a better year for homebuyers, if only because of how terrible 2023 was," says John Graff, CEO at Ashby & Graff Real Estate. Graff anticipates falling interest rates and increasing inventory could result in more opportunities for homebuyers in the months ahead.
The S&P 500 still has 30% upside between now and the end of 2025, according to Capital Economics. "Our end-2025 forecast of 6,500 for the index is premised on its valuation reaching a similar level to its peak during the dot com mania," Capital Economics said.
Anthony Denier, CEO of the trading platform Webull, says he believes the stock market will ultimately post a positive return in 2024 as investors anticipate interest rate cuts by the Fed. However, he adds, we probably won't see as big of a rally as we did in 2023.
What is the expected return of the stock market in the next 10 years?
U.S. stock returns: 2023 optimism carries forward
This heightened optimism is on par with the positive outlook in December 2021, when investors anticipated a 6% stock market return for 2022. Investor expectations for stock returns over the long run (defined as the next 10 years) rose slightly to 7.2%.
| S.No. | Company | Industry/Sector |
|---|---|---|
| 1. | Tata Consultancy Services Ltd | IT - Software |
| 2. | Infosys Ltd | IT - Software |
| 3. | Hindustan Unilever Ltd | FMCG |
| 4. | Reliance Industries Ltd | Refineries |
- High-yield savings accounts.
- Certificates of deposit (CDs)
- Bonds.
- Money market funds.
- Mutual funds.
- Index Funds.
- Exchange-traded funds.
- Stocks.
The S&P 500 is off to a terrific start in 2024, gaining 7% in under two months. If it keeps rising at the rate it's been rising, we could see a stock market gain of 42% by the time 2024 is done!
| Year | Open, $ | Close, $ |
|---|---|---|
| December 2024 | 45370 | 46983 |
| December 2027 | 58509 | 56472 |
| January 2028 | 56472 | 59561 |
| April 2028 | 56165 | 53195 |
