5 year stock market forecast

5 Year Stock Market Prediction

5 Year Stock Market Forecast

Smart investors are looking beyond today’s turmoil to invest longer term.  5 to 10 year strategies are quite the contrast to day trading techniques that live off of volatility.

Predictions for the 5 year forecast period are a good start. Anything beyond 5 years is also worthy to study, however less reliable since we can’t see technology and political changes coming, not to mention another health pandemic. Just before we take a look, it should be mentioned that few forecasters put out 5 year forecasts, because getting it wrong is embarrassing. They won’t take the ridicule from the media, so you have to put a prediction together for yourself. Given your wealth is at stake, this actually for the better.

We’ve got forecasts for today, 2022, this week, next 3 months, next 6 months, and now the 5 year and 10 year long term views.  We know technologies such as green energy, 5G, blockchain, and others will only grow and generate further advantages.

With Fed spending tapering, mountainous debt, rising interest rates, stagflation, and geopolitical strife there is a lot that could happen in the next 5 years.  The greater point is that most stocks will not be gaining much in the next few years. Profitability doesn’t look strong and Goldman Sachs is saying most of its profits will come from dividends payouts.

What’s supporting a good 5 year to 10 year stock market outlook is the huge Millennial generation along with a sizable Gen Z population who are already buying homes. The greater fear is this coming recession could happen anywhere from 2023 to 2025 but that would leave 2027 looking much better. Choose your stocks well, conservatively and you might come through the next stock market crash.

Start Investing for the 5 to 10 Year Period?

Investigating the 5 year or 10 year outlook is a sure sign you’re a wise investor. After all, if you don’t know what’s ahead for US business, then all of your investing is basically gambling (i.e., Bitcoin). You have to know which stocks are long term investments and be certain about when you’ll need to dump some of the speculative stocks you have now.

Would you rely on an AI stock prediction service for your 5 year outlook? Of course not, because the driving factors are human and emotional.

Just for context, here’s what’s happened in stocks the last 5 years:

Stocks last 5 years. Screenshot courtesy of Barchart.com

My 5 year market forecast is for continued but modest growth and I believe the US government will tackle the China problem, because they have to. The issue of competing with China and feeding the trade deficit will have to be dealt with.

The US Outlook is Positive

The US stock market has outperformed most of the experts predictions for 2021. Their guesses at the S&P index were all under where it is now. Any stimulus that’s added to the recovery will make it a strong outlook. But there are plenty of dangers. We look for stock market crash signals, and we find them in politics.

Everyone wonders what will cause the next stock market crash because there are so many working parts. The biggest danger is political tactics made because they have to do it (e.g., global interest rates head upward, dragging the US with it, while raising interest rates is needed to pay down massive US debt).

The Bureau of Economic Analysis forecast rising real GDP until about 2027, when it begins to tail off.

CBO offer’s their projections for the 5 to 10 year period ahead.

Long Term Economic Projections. Screenshot courtesy of CBO.

The 5 Year Predictions are Still Positive

The outlook for the 5 year stock market forecast in the US is positive. Despite the crushing debt, the US is on course to grow strongly. The Covid 19 pandemic (China) has caused this growth period to be slower with less inflation which actually aids the long upward, and safe progress.

US Trade Deficit Hit $75 Billion in June and $70 Billion in July

The economy needs less friction and it needs funds distributed to people and businesses which they haven’t been. States and cities are hanging onto whatever they receive and use Fed funding to pay down their debts. That’s not infrastructure.

We’ve discussed the stock market predictions for 2022/2023 and within that upward trend comes some big corrections. Perhaps in October, we might see the first. The big event comes in December of 2022 when the Republicans retake the senate. Even with a 2023 stock market crash, the markets will recover in time. By 2026, global demand will still be rolling along and the US will benefit.

The US is battling China, because China is positioning to take all the global trade marbles for themselves and leave the US and Europe out in the cold.

During the summer of 2021, we’ve seen the current US administration juggling endless tactics that are too far ahead of themselves (green energy, crushing US energy production, raising taxes on the wealthy). Some of these initiatives are good (supporting the burgeoning poor, infrastructure, new technology) but where is help for housing which is actually supporting the economy?)  Earnings this year have been great, but that picture will darken by 2023 when interest rates have to rise.

At that point, the reality of the new economy will come into focus. We don’t have clarity right now, which is why speculation and big Gov spending are letting investors ride high above the clouds. When the Republicans begin blocking Democrat initiatives, the Democrat house of cards will topple. It’s already toppling, and Joe Biden’s health concerns will make that picture worse.

We should see some good periods for the Russell 2000 and S&P small caps, but it’s a tough life for small business. The government simply isn’t intelligent enough to know how to grow small business without alienating big business and causing stock equities to suffer. Between a rock and a hard place. Yet small business drives employment.

Check out Tesla, Bitcoin, 5G, Google, Apple as they likely will continue to perform well.  Some believe oil stocks will do well for another 5 years.  And if the stock market does crash, it will likely return by 2027.

Enjoy the rocky road ahead. See more on the stock market forecast, stock market today, and what drives the S&P, Dow Jones, NASDAQ and Russell indexes. The broader you’re knowledge and the more diverse your perspective, the more likely you are to avoid picking stocks you should sell, and find the best stocks to buy for the next 5 years.

More Market Forecasts

See more forecasts on the real estate housing market, and the latest home prices and sales trends for numerous major metros in California including San Diego, Los Angeles, San Francisco, and Sacramento.  See stats on other cities, including Denver, Dallas, New York, Boston, Atlanta and in the Florida housing market in Miami and Tampa.  Visit linkedin if you’re seeking advanced level SEO and real estate marketing services.

Rising mortgage rates, inflation, reduced housing supply and high home prices threaten the markets, it appears 2002’s real estate scene will stay strong. Realtors may want to build their presence this year as house prices decline in 2023. Lower prices will bring plenty of homes onto the market and boost your opportunities.

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