“The investing landscape will different in Y 2022 than Y 2021, but the backdrop is very ripe for more gainers on the S&P 500, according our work here at HeffCap-LTN“–Paul Ebeling
We expects the S&P 50 to rise 10 to 15% % to 5,600+ by the end of 2022. If achieved, that would mark a 10% total return including dividends.
Through Tuesday, the S&P 500 advanced 25.2% YTD.
And “The equity bull market will continue,” said Goldman Sachs Chief US equity strategist.
There are lots of reasons for optimism as follows:
Corporate tax rates will probably remain unchanged next year and remain a tailwind to profits. S&P 500 earnings will grow by 10% in Y 2022 to $230/share, and we see sees sales for S&P 500 companies increased by at least 10% Y-Y. Plus, the millions of now savvy world wide retail investors will still be buying the dips, sending the bears into deep hibernation early.
So, investors will increase their portfolio allocations to stocks.
Now, US households own at least 50% of the $28-T in US cash assets, an increase of $3-T since before the VirusCasedemic. These households will shift some of their capital into equities over time.
While those are supporting factors for stocks, but Y 2022 will not be without its risks that could keep returns lower than the 1’s seen in 2021.
Decelerating economic growth, a tightening Fed, and rising real yields suggest investors should expect modestly below-average returns next yr may infect the optimism but little as I see it.
According our data the S&P 500 has historically generated an average 12-month return of 8% in environments of positive but slowing economic activity and rising interest rates.
Have a prosperous day, Keep the Faith!