It takes guts to do what you did...
Yes, you.
The past two years were full of hardships. It has been mostly tough times sprinkled with some good moments, instead of the other way around.
We're going through a pandemic for the first time in 100 years. Inflation is back at its highest level since the 1970s. And the current supply-chain issues are the worst we've seen in decades.
A lot of folks would've looked at just one of these situations and said "no thanks" to owning stocks. But if you've followed my work at all over this time, then you haven't missed out at all.
Still, you might be filled with fear again, right now, just a handful of weeks into the start of 2022...
Lots of folks are assuming the bull market end is right around the corner. They think the recent fall we've seen is just the beginning.
I think the opposite. Instead of being fearful, I want you to get greedy.
Today, I'll share why – including why stocks could nearly double by 2024.
8,100...
That's the level the S&P 500 Index could hit before the next bear market.
It sounds crazy, I know. This bull market is in its late innings... And we're already up a lot since it started. Stocks have doubled over the past three years alone. With the latest market pullback, some folks are wondering if the peak is already in.
But please understand... Bull markets do not die of old age. They die because the fundamentals change. And in our case, that hasn't happened yet.
My friend, there's plenty of upside left before the clock hits zero.
For the S&P 500 to hit 8,100, it would need to rally another 80% from here. I know it's a bold claim... And it might not play out exactly like I'll describe. But not only is it possible – it has happened before.
To see this, let's remember why folks are scared today... the Federal Reserve.
The Fed now expects to hike interest rates several times in 2022. The general consensus is that a rate hike is bad for the market. And that's true... over time. But the idea almost everyone believes – that the good times end as soon as interest rates tick higher – is simply not the case...
In fact, the opposite is true.
The start of previous rate-hike frenzies led to gains in the S&P 500... not crashes.
For example, the Fed hiked rates 17 times from June 2004 to mid-2006. Yet the S&P 500 soared over that period... rallying 46% before its peak in 2007.
Stocks climbed even more from 2016 to 2020. The Fed hiked rates for years... But the S&P 500 still rallied 80%.
Here's the thing... Jerome Powell took over as the Fed chairman in the middle of that last rate-hike cycle. We got to see him make the calls in real time. And he's still chairman today.
Sure, we can't see the Fed's exact playbook... But it will likely be similar to what we saw back then. Right now, this rate cycle is expected to last two to three years – much like the last time around.
With Powell using a similar playbook to the last cycle, we have a window of opportunity. Stocks could soar from today's levels while the rate hikes get underway.
That makes an 80% rally in the S&P 500 possible from here. And it means you really want to own stocks... despite the negative headlines.
Now, that doesn't mean stocks will soar forever. I'm also not expecting the market to move higher in a straight line... That's not how markets work. But today, with the market down and investors scared, you want to be greedy.
There will be volatility. But if you believe we're at the beginning of a major bust, history disagrees.
So as we begin 2022, I want you to be bullish. It has been an incredible couple years for the market. But based on history... you ain't seen nothin' yet!
Good investing,
Steve
Further Reading
With the choppy market action we saw in January, folks have been running away from stocks in droves. But this bull market still has room to run. And history shows us that staying long could lead to double-digit gains over the next year... Get the full story here: Investor Fear Points to More Upside in Stocks.
Last year was a steady climb higher for stocks. But the sudden pullback last month might have you spooked. Instead of worrying, we're looking at these two indicators to see what's really going on in the market... Read more here: A Market Health Check as We Enter 2022.
With the bull market humming along, you want to own stocks today. And this industry leader could be set to skyrocket as its market takes off...
THIS CLEANING-PRODUCTS GIANT CAN'T RELY ON COVID-19 FOREVER
Today's company is struggling as uncertainty takes over the market...
The world is slowly coming to terms with the fact that the novel coronavirus is here to stay. But that reality comes with new economic challenges. Investors don't know what to expect... And even solid businesses are getting tossed in the volatility. Today, we're looking at one example...
Clorox (CLX) is an iconic cleaning-products giant. It's known for its namesake bleach and other cleaning supplies. When the pandemic struck, folks grabbed up these items to sanitize their homes and workplaces. Recently however, inflation and supply-chain problems have driven up the company's costs – and investors are worried that the spike in demand from COVID-19 is beginning to fade. In the latest quarter, Clorox's net sales declined 8% to $1.7 billion... And the company expects to see continued cost pressures.
Shares of CLX are down almost 40% since their high in July 2020. Investor fears have sent prices to new 52-week lows. While this company sells products folks can rely on, this uncertain market is weighing on shares for now...
