The stock market's era of big gains may not be over

Published On Oct 22, 2024, 2:30 PM

The stock market, especially the S&P 500, has had a remarkable run over the past decade with a 13% annualized return. Recently, Goldman Sachs projected that this trend may slow, estimating a mere 3% annualized return over the next decade due to a heavy concentration of the index in just ten stocks. This concentration could lead to lower overall returns, as historical patterns suggest that such concentration typically correlates with below-average future returns. However, Goldman Sachs maintains a bullish outlook on long-term US economic and corporate profit growth, stating that while short-term projections appear muted, the underlying fundamentals are strong. Other analysts, like those from JPMorgan, argue that the market could continue to see significant gains, particularly if disruptive technologies lead the way forward.