After an impressive 90% surge in stock prices this year, investors are cautiously optimistic about the future of the market. The last time this type of growth in stock prices occurred was in 2003, and many are asking the same question: could this be the new normal or a flash in the pan?
For those who are unfamiliar with stock market movements, a 90% increase in a single year is an unusually strong performance. That makes the current situation on the market even more interesting for investors, as the potential for a longer-term trend cannot be ruled out.
One key factor to consider when evaluating the current conditions is the larger macroeconomic picture. The US economy is on course for steady growth in 2020, despite the turbulence caused by the coronavirus pandemic. This could be an encouraging sign for investors, as it indicates that the foundations for a healthy market outlook could be present.
The reactions of the different sectors to changes in the market is another factor to consider. Most stocks have seen a significant increase, but some sectors have lagged behind in comparison. These could potentially be the areas where you could find some stability and solid returns in the coming months.
Finally, the longer-term outlook of the stock market should also not be overlooked. Many investors are expecting the US economy to continue on its steady path of growth in the years to come. This could be a key factor if you are looking to invest in stocks, as it could be the foundation for a longer-term trend in stock prices similar to the one seen in 2003.
Given all these factors, the question for investors is whether the 90% surge in stock prices seen this year could be repeated in future years. The broader economic environment suggests that this type of growth could be possible, but given the unpredictable nature of the stock market, only time will tell if this could be the new normal or not.