Where to Invest Now: Our Midyear Outlook for 2018
If the bull market that began in March 2009 remains intact through August, it will become the longest on record, at least going back to 1932. So it's time for investors to repeat this mantra: Age is just a number. We think the stock market will finish the year strong as it emerges from the correction--defined as a loss of between 10% and 20%--that marked the start of 2018. Standard & Poor's 500-stock index is still down about 6% from its January peak.
As always, there are plenty of challenges to worry about. What's different now is that investors have started to worry about them--so look for continued volatility as moods swing on Wall Street. "I'm not bearish, but the risks are growing," says Kristina Hooper, global market strategist at Invesco. It's more important than ever to be on the alert for everything from rising inflation to increasing protectionism to political angst in advance of the U.S. midterm elections.
Characteristically, this bull is aging on its own terms, and strategies that worked at comparable periods in past markets aren't appropriate now. But investors who choose investments wisely in this late-stage (but not end-stage) bull market should prosper. Because it's the season, consider a baseball analogy: We may be into--or even past--the seventh-inning stretch. But fans who leave the game early risk missing some of the best plays.
In our January outlook we forecast an 8% return for the year, including dividends--and investors have earned
