The year ended with bonds flat, 71% of all global stocks in a bear market and the S&P 500 Index posting its worst December monthly return since 1931, ending a streak of nine consecutive years of positive annual total returns. That said, the benefits to growth from having a lower corporate tax rate and deregulation are going to take time for the full effect. Companies and investors around the world have only begun to react to the US being a more attractive place to operate. As a result, we should see another year of 3.0% economic growth. We are still in a bull market, so I expect to see at year end the S&P 500 at 3000 and the Dow Jones Industrial Average at 28,500.
This is an optimistic forecast, but I would rather commit to the results of my research than run with the safety of the herd. Staying invested in the year ahead should earn substantial rewards.