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Ask anyone with a 401(k) and they’ll likely agree — 2019 was a pretty good year for them. Every major market index increased by double digits from 2018.
Experts like Bob Parker with Raymond James in Scottsdale says there’s no reason not to be optimistic about the markets in 2020.
“Our base case in 2020 is a gain of maybe 5%, and we figure that there’s maybe a 70% chance of that. Our bull case is up about 13%, and our bear case is down about 7%.”
But there’s been some uncertainty going in to 2020. The trade war and the unpredictability of the upcoming elections could cause some problems.
Still, Parker says most indicators are positive.
"Consumer is still very strong, the fed on hold but generally accommodating, we see a re-acceleration of earnings next year, inflation is low, and interest rates are relatively low," he said. "So we think the pros outweigh the cons."
With few exceptions, election years have traditionally been good for the markets. Only twice since World War II have the markets been down during an election year. In 2000, the markets were down as a result of the dot-com bust, and in 2008, the markets were down leading into the Great Recession.
