Stocks Gained +16% in 2020; Wall Street Expects +7.6% In 2021
Published Friday, January 1, 2021 at: 6:43 PM EST
Despite the unexpected +16.3% return on stocks in 2020 and although the worst days of the COVID 19 crisis are likely still ahead, Wall Street strategists’ mean forecast for the Standard & Poor’s 500 in 2021 is for a +7.6% gain.
The Wall Street forecasts in this chart have been compiled annually since 2007 based on an article published in Barron’s in December every year. The venerable financial magazine asks strategists from 10 leading Wall Street firms for their forecast for the S&P 500 stock index and which industry sectors they expect to be the biggest winners and losers in the next 12 months.
The strategists’ forecasts in the December 21, 2020 issue of Barron’s ranged from 3800, equivalent to a +1% gain – by Citi and Bank of America Securities -- to a prediction by J.P. Morgan that the index would close 2021 at 4400, which would be a +17% gain. The mean forecast of the 10 strategists was that the S&P 500 would end 2021 at 4040 for a +7.6%.
Predicting the future of the stock market for any given 12-month period is not something even the top strategists at the largest firms can do, as is shown in this chart. It’s not a strategic investment approach for investors planning to buy and hold stocks for many years.
The mean forecast of Wall Street’s strategists in Barron’s in December 2020 called for the Standard & Poor’s 500 stock index to close 2020 at 3030 with just a +3% gain. They were way off.
The index closed Thursday at 3,756.07, setting a new record high. The gain for 2020 of 16.3% was a huge surprise, considering the public health crisis and related economic problems.
The index gained +0.64% from Wednesday, +1.42% from a week ago, and +50.67% from the March 23rd bear market low.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.
- Stocks Closed At A Record High; What's Expected For The Rest of 2021?
- Jobs Situation Report Pushes Stocks A Fraction From All Time High
- Inflation Rate Doubled In Past Two Months
- Fed Signals It's Thinking About Starting To Talk About Tightening
- Expect Inflation To Make Investors Nervous Through 2021
- Stocks Closed At A Record, Ignoring A Bad Jobs Report
- Stocks Soared 5.2% In April; Now, For The Good News
- A Window Of Opportunity Is About To Close
- Retail Sales, Housing Starts, And Stocks Rocket Higher
- The Fed Is Not Braking The Boom Anytime Soon
- A Black Swan Event And Higher Taxes Persist As Financial Risks Amid The Boom
- What You Need To Know Right Now To Manage Your Wealth
- Economic Expectations Improved Almost Overnight
- Investors Beware: The Asset Valuation Paradigm Changed
- Fed Says It Will Stick To Its Plan, As Bond Yield Rises
- Amid Strong Crosscurrents, Stocks Sank 2.5% This Past Week
- A New Rover Landed On Mars And Stocks Closed Lower For The Week
- Ironically, Amazon Profits By Perpetuating Stock Bubble Myth
- Stocks Closed At A New Record High: Can The Party Last?
- Don’t Fall For It
- Housing Boomed Again In December
- The Bad And Good Financial News This Week
- Stocks Set New High Closing Price Amid Turbulence
- Stocks Gained +16% in 2020; Wall Street Expects +7.6% In 2021