After a Rip-Roaring 2023, the Markets Are Taking a Breather (2024)

FAQs

What will the stock market return in 2023? ›

Stock market performance in 2023 was a reflection of the relatively strong U.S. economy. The S&P 500 index increased 24.31 percent, more than twice the long-run average return on U.S. large-cap stocks. China's stock returns reflect significantly lower economic growth in 2022 and 2023 relative to pre-COVID levels.

The consensus 12-month analyst price target for the S&P 500 is 5,614, representing about 6.8% upside from current levels.

Bar chart showing returns in 2023 and for the past two years cumulative for three categories. 2023 returns: “Big 7” average 105.0%, S&P 500 26.3%, S&P 500 excluding “Big 7” 14.7%.

Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.

Investors have plenty to cheer as 2023 draws to a close, with the S&P 500 ending the year with a gain of more than 24% and the Dow finishing near a record high. Easing inflation, a resilient economy and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year.

Stock prices have surged significantly over the past 18 months. The S&P 500 is up by 45% since it bottomed out in October 2022, while the tech-heavy Nasdaq has soared by a whopping 58% in that time. Investing now, then, means paying much higher prices than you would if you'd bought a year or two ago.

Economic growth actually accelerated above its 10-year average in 2023. That resilience, coupled with a fascination about artificial intelligence (AI), changed investors' collective mood. The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official.

How long does it take to double your money in the stock market? ›

Assuming an inflation rate of 4% and a conservative after-tax rate of return of 5%, you should aim for a savings target of $1.3 million to fund a 30-year retirement that begins at age 67. This would give you an investment portfolio that produces about $50,000 a year in income.

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

The average stock market return is about 10% per year, as measured by the S&P 500 index, but that 10% average rate is reduced by inflation. Investors can expect to lose purchasing power of 2% to 3% every year due to inflation.

The average stock market return of the S&P 500 is about 10% annually — and 6% to 7% when adjusted for inflation.

The S&P 500 is up about 24% in 2023, a stunning bounce back from last year—the index's worst performance since the 2008 financial crisis. The S&P 500 is set to log its best year since 2021's 27% return. Since 2000, the index has recorded a median annual gain of about 10%.

The last trading day of 2023 was a loser for U.S. equities, with the S&P 500 dropping 0.3%. However, the down day didn't dampen the outcome for the year as the index skyrocketed 24% in 2023.

By all accounts, 2023 was a prosperous year for investors. The S&P 500 posted a gain of 24.33% for the year. But that performance followed a tumultuous 2022, in which the market lost 19.44%. If you balance out the two years, you'd have about broken even.

While the overall 2024 outlook for stock market seems bleak, investing in small caps can be favourable this year, said the note. JP Morgan strategists in their note highlighted several reasons why markets can remain volatile in 2024, including economic recession and an invested yield curve.