2017 was a great year for investors, but financial analysts have asked the investors not to expect a repeat of 2017 this year. In 2017, the stock market exhibited a 20 percent surge and there were not many bumps throughout the year even in the face of natural disasters such as hurricane Irma, the North Korean nuclear threat, increased interest rates, and the uncertainties over the policies implemented by the White House.
Experts call stock market performance in 2017 an anomaly
The 9-year bull market, however, has been facing a tough time in 2018, so far, despite the newly implemented tax cuts, excellent corporate profits, and a better political environment with North Korea.
Marketing strategists have called the 20 percent surge in 2017 more of an anomaly than a hard reality. Analysts have asked investors not to expect the anomaly to happen again in 2018.
The market has already dropped by 10 percent in February marking the first dip of this kind in two years. The S&P 500 stood 8.3 percent lower than the all-time high of the index in January.
The rising interest rates may have a dire impact on corporate profits, and in the current environment, it seems as though bonds are a much better option than stocks. The question arises if this is it for the stock market?
Investors are trying to be as optimistic as possible and trying to find positive indicators to raise their hopes in the stock market. Financial experts have stated that they expect the market to be moving sideways for a while and if the high profits are not influencing the market now, then it is going to be difficult to see what will drive the market for the rest of the year.
It seems as though the economy and earnings are currently at the best it can get this year. With the pace of expected profits seemingly slow, investors are doubtful as to whether they should go ahead and pay such high prices for stocks.
Financial analysts have asked retirement savers to lower their expectations, especially when it comes to their 401(k)s. Retirement savers have been asked to conduct a check-in of their portfolio to analyze their portfolio exposure and to see whether there are enough bonds and trusts for real estate investments.
High-interest rates are appealing for short-term investments and it is advisable for retirement savers to add them to their portfolio to create a balance between the different stocks and bonds.