Strong market analysts predict five significant factors leading to a robust bull market by 2027.
The stock market has traditionally shown a bullish trend following U.S. presidential elections, regardless of the winner. This trend is further supported by top Wall Street analysts' predictions for the S&P 500, which are primarily based on the historical data on long-term returns.
Over multi-decade periods since 1950, the S&P 500 has demonstrated remarkable consistency. In fact, all 106 rolling 20-year periods between 1900 and 2005 delivered positive annualized total returns. Nearly half of these periods yielded annualized returns between 9.3% and 17.1%, enough to double an investment every 4 to 8 years.
This long-term consistency suggests that despite short-term volatility—including wars, economic crises, and policy shifts—the S&P 500 has historically been a reliable wealth builder over sustained periods. Analysts emphasize time as the most powerful ally in investing in the S&P 500, highlighting that “history conclusively shows that Wall Street’s major indexes head higher over 20-year periods.”
However, it's important to note that the current market is at historically high valuation levels. The Shiller P/E ratio, a measure of the market's valuation, recently approached 39, the third-highest in over 150 years. Previous times when the Shiller P/E exceeded 30 were followed by significant market declines.
This elevated valuation suggests that while the long-run returns remain statistically positive, the market may be prone to corrections or heightened volatility in the near term, especially among growth stocks tied to technologies like AI or crypto.
In other news, companies are reporting an average profit growth of 9.8% this year. However, a supplier to the chip industry recently disappointed with its outlook, causing a drag on the entire sector.
On a positive note, the IPO drought in Germany seems to be easing, with some promising opportunities emerging in the market. The new issue of €uro am Sonntag magazine is available now, offering extensive market analyses, background articles, and weekly stock market reviews.
Moreover, the digital subscription to the magazine provides an update with the most up-to-date closing prices in euros after the editorial deadline, as well as bonus content on weekends. Top Wall Street analysts expect the S&P 500 to reach 15,000 points by 2030.
Investment banking continues to be profitable for large U.S. houses, while the private equity sector is seeing increased activity, with several billion-dollar deals initiated weekly. All-time highs like the current one are considered an excellent entry point for investors.
However, it's crucial to remember that online fraud is a growing concern in 2024, posing a billion-dollar risk for companies and individuals alike. As always, careful consideration and due diligence are essential when making investment decisions.
The average length of bull markets in the S&P 500 since 1950 is 5.5 years. The current rally must last more than three years to be average. Despite the current market conditions, the sustained bull market prediction is a testament to the S&P 500's historical performance and the potential for future growth.
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