Can Stocks Continue Their Upward Momentum?

Can stocks continue their upward momentum?

If I had a concrete answer to that question, I’d gather every dollar I could find, load up on the high performers and rake in every bit of profits possible.

And then find a nice, white sand beach somewhere secluded and while away the days doing this and that and another thing.

In reality, no one knows the answer to that question.

Which is why there are plenty of investors – and money – still sitting on the sidelines wondering if this bull market is for real.

And, those individuals, while they’ve missed out on some tremendous growth, might have a point.

While corporate profits have, overall, been good, do they justify the momentous growth we’ve seen the past few years?  Probably not.

So why do the markets keep hitting all-time highs week after week?

Like it or not, part of it is the Trump effect.  His promises during the campaign season of rolling back burdensome regulations, lowering corporate and personal tax rates, and implementing a more business-friendly climate in D.C., and then, most importantly, following through with those promises, is helping to boost the markets to levels we’ve never seen.

Which has been fantastic for those who hold individual stocks, those with 401(k)s or similar retirement savings vehicles and even those who will rely on a public or private pension plan for their golden years.

But, once the “sugar highs” of lower taxes and a more hands-off government dissipate, will the markets have enough underlying, numbers-based positives to continue their upward momentum?

One potential for a continuation is all those sideline-sitters deciding to, finally, get into the markets in hopes of grabbing some of that gravy for themselves.  More dollars flowing into stocks means markets move higher.

And if the skeptics decide to continue sitting-it-out, thinking a cliff is approaching?  Well, I guess we’ll see how much more steam the U.S. stock market has left in it.

History isn’t on the side of an unchecked climb.  Read my last quarterly update, “Have You Been Riding the Stock Market Rocket Ship?” and linger on the Bull/Bear Market stats toward the end of the piece.  Nothing goes up forever.

But, so far, up is exactly where the markets have gone.  Here’s a glance at exactly how much, both for the fourth quarter of 2017 and the full year.

2017 Fourth Quarter Returns

The Dow Jones Industrial Average increased 2,314.13 or 10.33%.

The S&P 500 was up 154.25 for a percentage gain of 6.12%.

And the Nasdaq rose 407.43 points for a 6.27% gain.

2017 Stock Market Results

The returns for 2017 were just as impressive.

The Dow Jones Industrials rose a total of 4,956.62 points for a 25.08% gain.

The S&P 500 increased 434.78 or 19.42%.

And the Nasdaq added 1,520.27 points for a percentage increase of 28.24%.

Wrap Up

These stellar returns have gone a long way to bolstering the retirement accounts and pension plans of many Americans.

A much-needed assist considering how little most Americans have saved and the underfunding problem both public and private U.S. pension plans are facing.

We can hope these outsized returns continue so that these issues are lessened, but I wouldn’t bet a large sum on that.

Now on to our usual disclaimer:

We at Savings Beagle are not investment advisors.  It’s not our goal to encourage you to put your money into the markets, or to sell if you already have invested.

Rather, it’s to provide information to help illustrate the current state of the U.S. markets which can help guide your financial decisions.

Saving money – whether by investing in stocks, bonds or by simply putting a set amount into a savings account on a regular basis – is critical to your future financial well-being.

And we’re here to relay money saving deals and tips to make finding that excess cash that you can put to work a little easier.

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Stock charts courtesy of Morningstar.com