After a strong start for stocks to 2023 and despite the threat of a recession, investment pros see the rising 8 percent over the next four quarters, according to the Bankrate First-Quarter Market Mavens survey. In fact, it’s the tenth straight time the survey has predicted gains in the index over the upcoming 12 months.
Survey respondents said that they expect the S&P 500 to rise to 4,289 on average, through the end of the first quarter 2024. That’s up from 3970.99, when the survey closed on March 24. These experts continued to prefer U.S. stocks over international stocks, but they flipped their preference for value stocks in recent quarters to growth stocks.
“Survey respondents are increasingly optimistic that a new stock market advance could begin in the coming months or might have already begun,” says Mark Hamrick, Bankrate’s senior economic analyst. “For long-term investors, including those saving for retirement, a methodical approach requires less consideration of short-term market performance and more focus on results farther out over the time horizon.”
“The Federal Reserve has been raising interest rates for a year now, creating headwinds for the stock market,” adds Hamrick. “Officials are signaling they are close to the end of this tightening cycle. While uncertainties are still elevated involving recession risks and inflation, the economy has proven more resilient than expected in these early months of the year.”
Forecasts and analysis:
This article is one in a series discussing the results of Bankrate’s First-Quarter 2023 Market Mavens survey:
- Pros foresee stocks rallying 8 percent over the coming year
- Survey: Experts see 10-year Treasury yield below 4% over the next year
- Here are the pros’ top investing ideas and how to handle the Fed’s actions
Stocks expected to rise over next year
Coming off a rough 2022 with the S&P 500 hitting bear market territory, stocks look poised for a rebound over the next 12 months, say the investment experts surveyed by Bankrate. Following recent turmoil from some high-profile bank failures and a slowing economy, it looks like the Fed may be close to ending its streak of raising interest rates.
Through the first quarter of 2024, analysts expect the S&P 500 to climb 8 percent, to 4,289 from 3,970.99 when the survey closed on March 24. That follows a year of optimism in 2022, when each quarterly survey predicted that the market would be higher in a year. In the fourth-quarter 2022 survey, analysts expected the market to climb 7.8 percent over the coming year.
But while the average prediction is higher through the first quarter of 2024, analysts expect stocks may still undergo a lot of volatility between now and then.
“We believe that a recession will take place in the second half, and given the equity market’s tendency to bottom just before or right around recessions, we think a second-half bottom or recovery in equity markets is the most likely scenario,” says Sameer Samana, senior global market strategist, Wells Fargo Investment Institute.
The expectation of a near-term recession was shared by other analysts, despite their bullishness over the next year.
But as for when a bull market might begin, analysts were divided, with some even saying the bull run has already begun:
- 46 percent said that a new bull market may begin in the second half of this year.
- 23 percent said that a new bull market has already begun or will begin in the first half of this year.
- 15 percent said a new bull market will begin next year (2024).
- 8 percent said that it may be sometime after 2024 when a new bull market begins.
- 8 percent offered no comment.
“Since 1890 there have been 25 bear markets that have all been accompanied by recessions,” says Hugh Johnson, chief economist, Hugh Johnson Economics. “Bear markets ended and bull markets began during 23 of the 25 recessions. I anticipate a recession in Q2-Q4 and a bear market end during that time frame.”
Many eyes are on how the Federal Reserve adjusts interest rates, since that signals more favorable monetary policy and an end to the highly restrictive policy that began in March 2022.
“As inflation returns to target and the Fed normalizes rates to its long term target, strong domestic and global growth will create a robust backdrop for U.S. equity outperformance,” says Dec Mullarkey, managing director, SLC Management. “Dollar strength should fade, which is positive for overseas revenue growth for U.S. companies.”
Experts less optimistic about five-year stock returns
The survey respondents were quite a bit less optimistic in their expectations for the market over the next five years, compared with their expectations in the fourth-quarter survey. Nearly half of the analysts surveyed said they expect lower-than-normal returns over the next half-decade:
- About 46 percent say returns will be lower than long-term returns.
- About 38 percent of respondents say returns will be about the same as their historical average over the next five years.
- About 15 percent say returns will be above the historical average.
The results showed a big shift from the fourth quarter to the first quarter. Many analysts moved from expecting historically similar results in the last survey to lower-than-normal results in this one.
“Until we see better valuations, equities are at best fairly valued,” says Samana. “Unfortunately, a recession in the second half will not be kind to risk assets, which should mean lower-than-average returns over the coming five years.”
Among those expecting lower future returns, count Sam Stovall, chief investment strategist, CFRA Research. “Higher interest rates, oil prices, and valuations will likely hold back equity price appreciation,” he says.
On the other hand, Mullarkey expects higher-than-normal returns over the next five years and points to broader monetary reasons for his optimism.
“U.S. and global equities will surge as economies return to a stable inflation regime and central banks return to their traditional role of guardians of stable monetary policy rather than lead agents in driving market conditions and sentiment,” says Mullarkey.
U.S. stocks remain the place to be, say pros
Experts continue to prefer U.S. stocks to their international counterparts over the next 12 months, as they did in the prior survey. Here’s how the numbers break down:
- About 69 percent of respondents favor U.S. stocks in the coming year.
- Just 15 percent prefer international stocks.
- Only 7 percent said the returns between the two would be about the same.
In the fourth-quarter survey, 71 percent said they preferred domestic stocks.
“The legal and financial structure of the U.S. positions itself for growth,” says Kim Forrest, chief investment officer and founder, Bokeh Capital Partners.
“With the rising risk of recession, the safe haven (U.S.) will likely outperform,” says Stovall.
And Sameer Samana echoes that logic, saying: “We still believe the U.S. equity market is of higher quality, and less economically sensitive than its international peers, which will allow it to be a port in the storm during a recession.”
Growth stocks now preferred over value stocks
While these investment pros stuck to their preference for U.S. stocks, they flipped in their preference for growth stocks and value stocks, seeing growth equities as the better pick now. Value stocks fell significantly in the estimation of survey respondents.
- About 46 percent of respondents prefer growth stocks to value stocks over the next year.
- About 31 percent favor value stocks to outperform growth.
- About 23 percent think returns will be about the same.
That was a significant decline for value stocks since last quarter, when a whopping 71 percent picked them to outperform growth stocks. Meanwhile, growth stocks gained the favor of 46 percent of the pros, compared to just 21 percent in the fourth-quarter survey.
“Value should do better during a period of elevated rates and energy prices, both of which we see sustaining for the remainder of the year,” says Samana.
But others see the rise in interest rates beginning to top out, making growth stocks a more attractive prospect.
“Growth will dominate as inflation comes under control with the Fed on hold and contemplating rate cuts,” says Mullarkey. “A firming economy will provide opportunities for both earnings and multiple expansion. Technology will continue to lead.”
Others see opportunities regardless of whether value or growth leads the way.
Jim Osman, founder, The Edge Group, thinks “any companies going through corporate change which have hidden value” will remain attractive winners.
Methodology
Bankrate’s first-quarter 2023 survey of stock market professionals was conducted from March 17-24 via an online poll. Survey requests were emailed to potential respondents nationwide, and responses were submitted voluntarily via a website. Responding were: Jim Osman, founder, The Edge Group; Louis Navellier, CIO, Navellier & Associates, Inc.; Dec Mullarkey, managing director, SLC Management; Sameer Samana, senior global market strategist, Wells Fargo Investment Institute; Kenneth Chavis IV, CFP, senior wealth manager, LourdMurray; Charles Lieberman, managing partner and chief investment officer, Advisors Capital Management; Marilyn Cohen, CEO, Envision Capital; Kim Forrest, chief investment officer/founder, Bokeh Capital Partners; Hugh Johnson, chief economist, Hugh Johnson Economics; Sam Stovall, chief investment strategist, CFRA Research; Chuck Carlson, CFA, CEO, Horizon Investment Services; Brad McMillan, chief investment officer, Commonwealth Financial Network; Clark A. Kendall, CFA, CFP, president and CEO, Kendall Capital.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
FAQs
Through the first quarter of 2024, analysts expect the S&P 500 to climb 8 percent, to 4,289 from 3,970.99 when the survey closed on March 24. That follows a year of optimism in 2022, when each quarterly survey predicted that the market would be higher in a year.
Will stock market recover in 2023? ›
"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.
What is the most successful stock predictor? ›
So, while the CAPE ratio is the world's most reliable stock market forecaster, it pays to think long-term, maintain a consistent allocation, and ignore the useless rambling of forecasters and our guts.
Are we entering a bull market 2023? ›
June 8, 2023, at 4:26 p.m. The S&P 500 is now in what Wall Street refers to as a bull market, meaning the index has risen 20% or more from its most recent low.
What percent of 18 29 year olds are investing in the stock market? ›
U.S. Stock Ownership, by Subgroup
Currently, the consensus estimate is for an 8% contraction in the growth rate, followed by a 6% contraction in the second quarter. For calendar-year 2023, the consensus earnings estimate is for a 2% contraction. But that estimate is still coming down, and based on historical patterns, could continue to do so.
Where will the stock market be at the end of 2023? ›
The S&P 500 trading at 17-18 times earnings by late 2023 — about 5.5% higher from today's level — seems quite realistic.
What is the stock market prediction for 2024? ›
The stock market is poised for a strong 2024 as corporate earnings are poised to impress. "Earnings are likely to outpace the economy in 2024," Bank of America's Savita Subramanian said in a Monday note. Also helping the outlook for stocks is the trillions of dollars of sidelined cash that could get invested.
What is the number 1 rule of stocks? ›
1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.
What are the predictions for the stock market to rise? ›
But those headwinds, which experts warn could broaden into a recession, may convince the Fed to pause on its series of rate hikes, JPMorgan noted. That could drive the stock market higher, pushing the S&P 500 to 4,200 by the end of 2023, or about 10% higher than its current levels, the investment firm predicts.
Three Key Sectors in Which to Invest in 2023
- Consumer staples. ...
- Precious metals. ...
- Healthcare.
HOW LONG DO BULL MARKETS TYPICALLY LAST? Since 1932, bull markets have lasted an average of nearly 5 years and the S&P 500 sees a gain of 177.8%. The longest bull market started in March 2009, near the end of the Great Recession, and roamed Wall Street for almost 11 years.
How long does a bull market usually last? ›
How long do bull markets usually last? Historically speaking, the average length of a bull market is 9.6 months. The average gain for a bull market is 112%. Keep in mind these are the average and they have been extending with each bull market.
How much should a 70 year old have in the stock market? ›
Indeed, a good mix of equities (yes, even at age 70), bonds and cash can help you achieve long-term success, pros say. One rough rule of thumb is that the percentage of your money invested in stocks should equal 110 minus your age, which in your case would be 40%.
How much should a 72 year old have in stocks? ›
For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you should keep 30% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.
Who owns the most stocks in the world? ›
'Billionaire Stocks': Bill Gates, Berkshire Hathaway (BRK.B)
The natural stock pick held by the world's wealthiest person is Microsoft (NASDAQ:MSFT), the giant tech company Bill Gates co-founded with Paul Allen in 1975. Gates still owns almost 103 million shares of the company worth $15.4 billion.
Is 2023 a good year to start investing? ›
U.S. equities may disappoint in 2023, but patient investors can find potential income and returns in other markets. A grueling bear market, touched off by decades-high inflation and an aggressive Federal Reserve response, made 2022 one of the most challenging years for investment returns in the last half century.
Will 2023 be a bear market? ›
“The bear [market] is almost over, and a new exciting bull market awaits in the second half of 2023,” he said, pointing to potential in technology stocks in particular.
What stocks will double in 2023? ›
7 Growth Stocks That Could Double Your Money in 2023
| RAMP | LiveRamp | $24.68 |
|---|
| KYMR | Kymera Therapeutics | $28.35 |
| SDGR | Schrodinger | $26.10 |
| HSAI | Hesai Group | $8.10 |
| ABCL | AbCellera Biologics | $5.74 |
2 more rowsMay 14, 2023
One of Wall Street's most vocal bears expects the stock market to fully recover its losses and trade to record highs in 2024. "This is not the end of the world.
5-year, 10-year, 20-year and 30-year S&P 500 returns
| Period (start-of-year to end-of-2022) | Average annual S&P 500 return |
|---|
| 5 years (2018-2022) | 7.51% |
| 10 years (2013-2022) | 10.41% |
| 20 years (2003-2022) | 7.64% |
| 30 years (1993-2022) | 7.52% |
May 30, 2023
10 of the Best Stocks to Buy for 2023
| Stock | YTD Total Returns Through June 6 |
|---|
| Walt Disney Co. (DIS) | 6.1% |
| PayPal Holdings Inc. (PYPL) | -8.7% |
| EOG Resources Inc. (EOG) | -10.9% |
| Grupo Aeroportuario del Sureste SAB de CV (ASR) | 26.1% |
7 more rows3 days ago
3 Penny Stocks That Are Poised to Explode in 2023
| ABEV | Ambev | $2.91 |
|---|
| NOK | Nokia | $4.03 |
| EGY | Vaalco Energy's | $3.69 |
May 15, 2023
5 Best Growth Stocks for the Next 10 Years
| Growth stock | Year-to-date return (as of May 10 close) |
|---|
| Apple Inc. (ticker: AAPL) | 33.8% |
| DexCom Inc. (DXCM) | 8.2% |
| Fortinet Inc. (FTNT) | 37.1% |
| Tesla Inc. (TSLA) | 36.8% |
1 more rowMay 11, 2023
The updated Dow Jones price prediction for 2024 is $37,877. Long Forecast expects Dow Jones to trade at 33,372 points by the end of Q2 2023 and around 35,000 points by the end of 2023. The maximum of the year should be 36,770.
What is the 3% rule stock? ›
This is often used as a guideline to determine if a breakout or breakdown is valid. The price should move at least 3% above or below the respective level for the move to be regarded as valid.
What is the 80% rule stock? ›
In investing, the 80-20 rule generally holds that 20% of the holdings in a portfolio are responsible for 80% of the portfolio's growth. On the flip side, 20% of a portfolio's holdings could be responsible for 80% of its losses.
What is 10% rule in stock market? ›
The 10,5,3 rule
Though there are no guaranteed returns for mutual funds, as per this rule, one should expect 10 percent returns from long term equity investment, 5 percent returns from debt instruments. And 3 percent is the average rate of return that one usually gets from savings bank accounts.
What is the S&P forecast for 2023? ›
Analysts are forecasting full-year profit growth for 2023 of just 1.2%. At the same time, the S&P 500's forward 12-month price-to-earnings ratio is now at 19 compared with 17 at the end of 2022 and a long-term average of about 16, according to Refinitiv data.
What stocks do well when rates rise? ›
The financial sector has historically been among the most sensitive to changes in interest rates. With profit margins that actually expand as rates climb, entities like banks, insurance companies, brokerage firms, and money managers generally benefit from higher interest rates.
S&P 500 10 Years Forecast (Until 2032)
| Year | Price |
|---|
| 2023 | 4 200 |
| 2024 | 4 900 |
| 2025 | 5 500 |
| 2026 | 5 750 |
6 more rows2023 US sector outlook
- Real estate.
- Materials.
- Industrials.
- Communication. services.
Great growth stocks
| Company | 3-Year Sales Growth CAGR | Industry |
|---|
| Tesla (NASDAQ:TSLA) | 40% | Automotive |
| Shopify (NYSE:SHOP) | 52% | E-commerce |
| Block (NYSE:SQ) | 56% | Digital payments |
| Etsy (NASDAQ:ETSY) | 48% | E-commerce |
6 more rowsThe answer is no, according to advisors and investment analysts. "Allocating more funds to high-yielding CDs, money market funds, or treasuries may seem prudent; however, this is a form of market timing and should be avoided," explained Jonathan Shenkman of Shenkman Wealth Management.
What is the best age to sell a bull? ›
A generally accepted guideline is to purchase/use only yearling bulls that have a minimum 32-cm scrotal circumference. Bulls can remain in service until they are 10 or 12 years of age.
What is the average stock market return over 30 years? ›
5-year, 10-year, 20-year, 30-year Average US Stock Market Return
| Period | Average stock market return | Average stock market return adjusted for inflation |
|---|
| 5 years (2017 to 2021) | 17.04% | 13.64% |
| 10 years (2012 to 2021) | 14.83% | 12.37% |
| 20 years (2002 to 2021) | 8.91% | 6.40% |
| 30 years (1992 to 2021) | 9.89% | 7.31% |
In general, bull markets are a better time to invest. Yes, stock prices are higher, but it's an overall less risky time to invest. You'll have a greater chance of selling assets for a higher value than when you bought them. "The markets can be very volatile in the short term," says Nwasike.
What are the worst stocks to invest in? ›
The 7 Worst Stocks to Buy Now
| FRC | First Republic Bank | $23.03 |
|---|
| ACHR | Archer Aviation | $2.54 |
| NUVB | Nuvation Bio | $1.64 |
| FFIE | Faraday Future Intelligent Electric | $0.45 |
| MULN | Mullen Automotive | $0.14 |
2 more rowsMar 18, 2023
Having a higher allocation of stocks is optimal in a bull market, where there's more potential for higher returns. One way to capitalize on the rising prices of a bull market is to buy stocks early on and sell them before they reach their peak.
What are the signs of bull market ending? ›
Notably, at the end of a bull market you are likely to observe a number of economic indicators such as rising commodity prices, rising inflation, low unemployment, lots of speculation, high volatility and most importantly, a notable correction in stock prices.
If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. How Much Should a 70-Year-Old Have in Savings? Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement.
How much cash should a 70 year old have? ›
Emergency Funds for Retirees
Despite the ability to access retirement accounts, many experts recommend that retirees keep enough cash on hand to cover between six and twelve months of daily living expenses. Some even suggest keeping up to three years' worth of living expenses in cash.
What is the average 401k balance for a 70 year old? ›
The average 401(k) balance by age
| Age | Average 401(k) balance | Median 401(k) balance |
|---|
| 50-55 | $161,869 | $43,395 |
| 55-60 | $199,743 | $55,464 |
| 60-65 | $198,194 | $53,300 |
| 65-70 | $185,858 | $43,152 |
5 more rowsWhat Percentage of Retirees Have a Million Dollars? It is estimated that 10 percent of retirees have a million dollars, according to SmartAsset.
At what age should you stop investing? ›
You probably want to hang it up around the age of 70, if not before. That's not only because, by that age, you are aiming to conserve what you've got more than you are aiming to make more, so you're probably moving more money into bonds, or an immediate lifetime annuity.
Where is the safest place to put your retirement money? ›
Most of our experts agree that one of the safest places to keep your money is in a savings account insured by the Federal Deposit Insurance Corporation (FDIC). “High-yield savings accounts are an excellent option for those looking to keep their retirement savings safe.
What stock has made the most money ever? ›
The Best Performing Stocks in History
- Coca-Cola. (NASDAQ: KO) ...
- Altria. (NASDAQ: MO) ...
- Amazon.com. (NASDAQ: AMZN) ...
- Celgene. (NASDAQ: CELG) ...
- Apple. (NASDAQ: AAPL) ...
- Alphabet. (NASDAQ:GOOG) ...
- Gilead Sciences. (NASDAQ: GILD) ...
- Microsoft. (NASDAQ: MSFT)
Apple Stock Is No. 1 By Value
While Bank of America is the No. 1 Warren Buffett stock by number of shares, Apple is the No. 1 stock in Berkshire's portfolio by market value. That stake was worth a whopping $150.9 billion at the end of March 2023.
How many millionaires are made from stocks? ›
The roaring stock market and crypto gains created more than a million new millionaires in the U.S. last year, according to a new report. The number of Americans with $1 million or more in investible assets surged to a record 14.6 million in 2021, according to a report from wealth research firm the Spectrem Group.
Will stocks continue to rise in 2023? ›
Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.
One of Wall Street's most vocal bears expects the stock market to fully recover its losses and trade to record highs in 2024. "This is not the end of the world.
Will stocks go back up in 2024? ›
The stock market is poised for a strong 2024 as corporate earnings are poised to impress. "Earnings are likely to outpace the economy in 2024," Bank of America's Savita Subramanian said in a Monday note. Also helping the outlook for stocks is the trillions of dollars of sidelined cash that could get invested.
Will stocks recover in 2024? ›
Stocks expected to rise over next year
Through the first quarter of 2024, analysts expect the S&P 500 to climb 8 percent, to 4,289 from 3,970.99 when the survey closed on March 24. That follows a year of optimism in 2022, when each quarterly survey predicted that the market would be higher in a year.
Is 2023 a good time to invest? ›
U.S. equities may disappoint in 2023, but patient investors can find potential income and returns in other markets. A grueling bear market, touched off by decades-high inflation and an aggressive Federal Reserve response, made 2022 one of the most challenging years for investment returns in the last half century.
What is the Dow predicted for 2024? ›
Dow Jones predictions: 2023 and beyond
The Dow Jones prediction for February 2024 was 33,232 points, according to the EFA. While the maximum value could be 35,226 points, the minimum was expected to be 31,238 points. Meanwhile, it saw the index potentially closing at 34,900 in February 2025.
What is the S&P 500 expectations for 2023? ›
Analysts are forecasting full-year profit growth for 2023 of just 1.2%. At the same time, the S&P 500's forward 12-month price-to-earnings ratio is now at 19 compared with 17 at the end of 2022 and a long-term average of about 16, according to Refinitiv data.
How much will stocks grow in 10 years? ›
10-year, 30-year, and 50-year average stock market returns
| Period | Annualized Return (Nominal) | $1 Becomes... (Nominal) |
|---|
| 10 years (2012-2021) | 14.8% | $3.79 |
| 30 years (1992-2021) | 9.9% | $11.43 |
| 50 years (1972-2021) | 9.4% | $46.69 |
Though there is no ideal time for holding stock, you should stay invested for at least 1-1.5 years.
Should you keep stock for years? ›
For a holding period of less than one year, any gains will be taxed at a person's marginal income tax rate. By holding onto a stock for more than one year, an investor will likely lower their tax burden. It can be helpful for investors to speak with a certified tax professional before adopting any tax strategy.
