On December 26, I predicted that at some point in 2019 the S&P 500 would be up at least 25% from its 2018 close.
I made that same prediction on CNN in February … and was laughed at.
You can click the picture below to watch the interview, or click here.
Well, the S&P 500 reached a new all-time high of 3,047.87 today.
That’s a gain of 21.6% from the 2018 close. Just a few more strong days and we’ll be right at my 25% goal.
So, who’s laughing now?
Ask yourself this question: Do I want to be in stocks in 10 years? If you answered “yes,” then you need to be in stocks now. Not tomorrow. Not in a month. Not when the market hits its next high. Today.
The reasoning behind that is simple, and I wrote an article last week describing why I’m all in on stocks right now.
The evidence is in the numbers. We have low interest rates … low inflation … low unemployment … a Fed that is cutting rates … a GDP that’s still decent … and the market isn’t overvalued! The S&P 500 currently trades at about 16 times 2020 earnings. That’s slightly above average, sure. But it’s nowhere near bubble levels.
That’s not what the financial media would have you believe, though. And this frustrates me beyond belief. The media is supposed to share the news and tell us how we are being affected. But instead, the industry is driven by money and advertising, and as a result the headlines are filled with politics and negativity.
If you listened to the everyday noise, you would never believe that the market is up 20%+ so far this year.
You would think stocks were expensive. You would think we’re on the verge of a recession. You would think that the trade concerns and political tensions were keeping stocks depressed.
But that couldn’t be farther from the truth.
Stocks in general are at all-time highs. And just as important … the semiconductors are at record prices as well! When chip stocks are breaking out to the highest level ever, that says something about the economy — and it’s something we need to pay attention to.
Third-quarter earnings are coming in better than expected, and full-year estimates are on the rise. In fact, I expect earnings to really ramp up in 2020 — especially if a trade deal between the U.S. and China gets done.
Plus, the indices are poised for a year-end rally. And all signs point toward retail sales coming in very strong this holiday season, which would also send share prices higher.
So, here’s my new prediction: Even as we sit at new all-time highs, I believe the S&P 500 will rally at least another 18% in the coming 12-18 months … to 3,600! And there is a good chance that I am underestimating that upside potential.
That doesn’t mean there won’t be volatility. I expect to see plenty of ups and downs along the way. But those swings are what provide the buying opportunities I look for in my Investment Opportunities newsletter. And at the end of the day, corporations are planning to make a lot of money next year … and that should equal higher stock prices.
I remain as bullish as ever. The numbers are bullish, too, and nothing is changing next year. I look for 2020 to be one of the best years yet.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
