S&P 500 2024 Forecasts Galore: Can Analysts Finally Get it Right?
It's that time of the year when analysts make predictions for the S&P 500 index in 2024 using crystal balls and setting targets. As is often the case, these forecasts end up being detached from reality and, consequently, quite inaccurate.
For instance, Goldman Sachs has been notably incorrect in crucial years, particularly in 2000 and 2008. Recalling their overly optimistic stance, analysts provided S&P 500 forecasts for the last two years, with an initial highly positive target of 5100 by the end of 2022.
They suggested that 2023 would be a transitional year with a conservative target at 4000 points. However, reality turned out quite differently.
The target game—because that's essentially what it is, given the inherent difficulty in making accurate predictions—is now an annual tradition among analysts. So, here's the first optimistic indication for 2024.
The reality is that no one has the foggiest idea, as they should, but we can make plausible assumptions on the data we have available to us. It may give an idea to study historical stock market returns, certainly, it will not help us predict the future but it helps us better understand the performance under certain conditions or targets reached.
From 1928 to the present, there have been 34 years in which the S&P 500 has risen by 20 percent or more while if we see the total declines, the years are reduced to 26. This means that the stock market has recorded strong rises (+20%) with more than 30% compared to declines, and the average loss has been about 13% (in bearish years). More specifically, if the S&P 500 closes 2023 with +20% or more, let's see how equities have performed (historically) the year after:
In the 34 years of rises of 20% or more, the stock market also
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