This 'Easy' Stock Boom Points to 17% Upside By Brett Eversole
Investing is starting to feel easy again... That's a major change from the pain in 2022 – and the disbelief in 2023. Stocks have marched higher this year with nearly zero volatility. The S&P 500 Index has already hit more than 20 new all-time closing highs this year. But even that isn't the biggest force behind the "easy" feel in markets. Far more important is this... Even on days when we're not hitting new highs, we've been darn close. Based on history, that means the gains we've seen can continue – with 17% potential upside over the next year.
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No bull market is a one-way ride up. Stocks can still swing erratically during a rally... with lots of downs alongside the ups. Those kinds of markets can feel scary, even though everyone is making money. By contrast, an "easy" market is marked by a relentless push higher. Stocks go up a little at a time, day after day. The down days are rare. And they're never more than a slight breather. That's what we've seen so far in 2024. Stocks have marched higher in a steady, workman-like fashion. Take a look... One way to measure the ease of today's market is its proximity to all-time highs. By this measure, the S&P 500 has pulled off an incredible streak. Specifically, stocks have stayed within 2% of an all-time high since January 8. That's 60 straight trading days of stocks being incredibly close to new highs. The lack of volatility is what makes investing feel easy. This is a good sign for future returns, too. We've only seen 11 other streaks this long in the past 30 years. And the gains have a history of continuing. Take a look... The past three decades have been great for stock investors. The S&P 500 returned 8.4% a year over that period. But if you buy during times like today's easy market, you can do much better... Similar setups led to 6.6% gains in six months and 16.5% gains in the next year. That's massive outperformance. It's nearly double what you'd normally expect to earn in a year with a typical buy-and-hold approach. What's more, these situations have a perfect track record of consistent profits. Stocks were higher 100% of the time a year later... And they were up double digits 81% of the time. The market has gotten easy for investors this year. But we shouldn't fear a reversal anytime soon, according to history. We're in the middle of an incredible streak. And it points to even bigger gains in the months ahead. Make sure you're positioned to take advantage of it. Good investing, Brett Eversole Further Reading The S&P 500 has continued hitting new all-time highs. Some folks get nervous about rallies like these. According to history, though, new all-time highs aren't something to worry about. In fact, stocks will likely head higher from here... Read more here. "Most stocks are moving higher right now – not just a few," Brett writes. The popular tech giants aren't the only stocks rallying today. One vital index is hitting multiyear highs. And that tells us the current bull run is healthy... Learn more here. |
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