When Will the Stock Market Recover? Here’s What Experts Predict (2024)

FAQs

When Will the Stock Market Recover? Here’s What Experts Predict? ›

After ending the year down nearly 20%, the S&P 500 index is in the green for 2023. And the Nasdaq Composite — which plunged 33% in 2022 — is up more than 4.5% this year. So when will stocks fully recover from the bear market? Many experts appear optimistic it will happen in 2023.

When will the stock market recover is a question no one has a solid answer for. While some experts think the stock market is more likely to recover next year, some experts do see some potential for recovery in 2024. With the Federal Reserve raising interest rates, borrowing money is also increasing in price.

"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.

In a nutshell, nobody knows when the stock market will recover and start reaching new all-time highs. It could happen in a year or so if things go very well economically, or it could take several years. After the dot-com crash, it took some solid companies a long time to get back to where they were.

The stock market is poised for a strong 2024 as corporate earnings are poised to impress. "Earnings are likely to outpace the economy in 2024," Bank of America's Savita Subramanian said in a Monday note. Also helping the outlook for stocks is the trillions of dollars of sidelined cash that could get invested.

For calendar-year 2023, the consensus earnings estimate is for a 2% contraction. But that estimate is still coming down, and based on historical patterns, could continue to do so.

One of Wall Street's most vocal bears expects the stock market to fully recover its losses and trade to record highs in 2024. "This is not the end of the world.

The S&P 500 trading at 17-18 times earnings by late 2023 — about 5.5% higher from today's level — seems quite realistic.

“The bear [market] is almost over, and a new exciting bull market awaits in the second half of 2023,” he said, pointing to potential in technology stocks in particular.

What is the longest time for the stock market to recover? ›

As shown in the table below, the recovery period for U.S. stocks has been as long as 15 years: In the wake of the 1929 Crash, the IA SBBI US Large Stock Index didn't fully recover until late 1944. For gold bugs, the longest recovery period spanned more than 26 years (from October 1980 until April 2007).

9, 2007 -- but by September 2008, the major stock indexes had lost almost 20% of their value. The Dow didn't reach its lowest point, which was 54% below its peak, until March 6, 2009. It then took four years for the Dow to fully recover from the crash.

After dropping more than 18% in 2022, the S&P 500 is now up around 6% year to date (as of May 4), leading some investors to wonder if it's safe to invest now. The short answer is "yes." The longer answer is, "yes, you should be investing regardless of market movements, if you have the means."

Analysts are forecasting full-year profit growth for 2023 of just 1.2%. At the same time, the S&P 500's forward 12-month price-to-earnings ratio is now at 19 compared with 17 at the end of 2022 and a long-term average of about 16, according to Refinitiv data.

The updated Dow Jones price prediction for 2024 is $37,877. Long Forecast expects Dow Jones to trade at 33,372 points by the end of Q2 2023 and around 35,000 points by the end of 2023. The maximum of the year should be 36,770.

Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.

Which stocks to buy for 5 years? ›

Bear markets tend to be short-lived.

The average length of a bear market is 292 days, or about 9.7 months. That's significantly shorter than the average length of a bull market, which is 992 days or 2.7 years. Every 3.5 years: That's the long-term average frequency between bear markets.

The S&P 500 gained 0.6% on Thursday, pushing the market 20% higher than the trough stocks hit in October, closing at 4,294. That means Wall Street was finally released from the claws of a bear market — when stocks falls 20% or more from a recent high for a sustained period of time — that began in June 2022.

Wall Street is feeling bullish again. The S&P 500 rallied Thursday to end the day in a bull market, marking a 20% surge since its most recent low, reached on October 12, 2022. That brings to end the bear market that began in January 2022.

Stock markets quickly recovered a majority of their Black Monday losses. In just two trading sessions, the DJIA gained back 288 points, or 57 percent, of the total Black Monday downturn. Less than two years later, US stock markets surpassed their pre-crash highs.

Investors who shifted to cash after the 1929 crash faced a 34-year wait to break even, compared with 15 years for those who remained invested and less than 7 years for those who drip-fed additional small amounts in.

The Dow Jones did not return to its peak close of September 3, 1929, for 25 years, until November 23, 1954.

Compared with the Stock Market Crash of 1929, which sparked the decade-long Great Depression, the markets recovered relatively quickly after the stock market crash of 1987, regaining their pre-crash heights within two years.

Steven Spielberg and Jeffrey Katzenberg both are reported to have lost from the funds. So did banks HSBC and Royal Bank of Scotland. Tufts University has written off a $20 million investment with Madoff, and Yeshiva University is another reported victim.

The Great Recession lasted from roughly 2007 to 2009 in the U.S., although the contagion spread around the world, affecting some economies longer. The root cause was excessive mortgage lending to borrowers who normally would not qualify for a home loan, which greatly increased risk to the lender.

How much does it cost to recover 70% loss? ›

Do you lose all the money if the stock market crashes? No, a stock market crash only indicates a fall in prices where a majority of investors face losses but do not completely lose all the money. The money is lost only when the positions are sold during or after the crash.

Invest for the long term: One of the best ways to avoid losses in stocks is to invest for the long term. This means you shouldn't buy stocks and then sell them immediately if they decline in value. Instead, it would be best if you held onto them for the long haul.

The answer is no, according to advisors and investment analysts. "Allocating more funds to high-yielding CDs, money market funds, or treasuries may seem prudent; however, this is a form of market timing and should be avoided," explained Jonathan Shenkman of Shenkman Wealth Management.

S&P 500 10 Years Forecast (Until 2032)

In terms of a price target, Bank of America is targeting S&P 500 5,150 to 8,700 with its S&P 500 price forecast for 2030, but it is worth noting that some others are calling for a move as high as 10,000 by the time we get to 2032.

To some investors, this might seem unlikely. The Dow Jones Industrial Average, an index that has astonished with its ascent over the past decade, likely will continue to astonish through the 2020s, rising to 50,000 by 2027.

Keep that in mind with whatever the market dishes out next, because while it might get ugly, you can be pretty sure that I'm going to keep betting on the Dow to be close to 116,200 by late 2040.

Average Market Return for the Last 30 Years

When we add another decade to the mix, the average return inches closer to the annual average of 10%. Looking at the S&P 500 for the years 1992 to 2021, the average stock market return for the last 30 years is 9.89% (7.31% when adjusted for inflation).

Will stock market losses recover? ›

No one knows when the stock market will recover

The truth is, Wall Street has a lousy track record when it comes to short-term predictions. The good news is, that doesn't matter to long-term investors. History strongly suggests that a recovery will happen at some point. We simply don't know when.

So, if you're asking yourself if now is a good time to buy stocks, advisors say the answer is simple, no matter what's happening in the markets: Yes, as long as you're planning to invest for the long-term, are starting with small amounts invested through dollar-cost averaging and you're investing in highly diversified ...

Bear markets tend to be short-lived.

The average length of a bear market is 292 days, or about 9.7 months. That's significantly shorter than the average length of a bull market, which is 992 days or 2.7 years. Every 3.5 years: That's the long-term average frequency between bear markets.

For financial goals that are at least three to five years away, the benefits of investing generally outweigh the risks. “When setting aside money for a long-term goal, there is a greater likelihood that if an investment's value decreases, there is still time for it to recover,” Maizes says.

It's generally a good idea to invest when the stock market is down as long as you're planning to invest for the long term. Seasoned investors know that investing in the market is a long-term prospect.