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What’s the Stock Market Outlook for 2020 and Beyond?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Investing money in the stock market is one way to build wealth — many view this form of investment as a critical piece of retirement. You may be ready to start your investment portfolio. However, placing your money into the market without a strong understanding of the current conditions can be nerve-wracking.

As with most things, knowledge can help to ease that uncomfortable feeling. The more you know, the more comfortable you will be in your market investments.

Below, we take a look at the past and share expert opinions about stock market predictions for 2019.

2018 market performance at a glance

Understanding the past year will help to better frame the stock market predictions for 2019.

When looking at the stock market forecast over time, we will refer to the Standard & Poor’s (S&P) 500. The S&P 500 is an index of the largest 500 publicly traded companies in the U.S. stock market. Although the investment portfolios of each individual investor will react differently to the changing market, the S&P 500 is a good benchmark to follow market changes.

In 2018, the stock market proved to be very volatile. Although the S&P 500 has shown a small year-to-date increase, the slight rise has been accompanied by a bumpy ride.

The S&P 500 started off the year with a bang when it reached an all-time high in January, but it subsequently dropped 10.16% in February. It continued to rise and fall in significant swings for most of the year. In fact, although the S&P 500 hit multiple record highs this year, October 2018 was the worst month for the past seven years.

Even with all this turbulence, the bull market — when the prices in the stock market are rising — became the longest-running in history on August 22. As we near the end of the year, more investors are convinced that we are heading into a bear market — when the prices in the market are falling.

“This type of volatility mirrors that of which the US economy has seen at the onset of previous bull market wind-downs,” said Paul Shelton Jr., a portfolio manager with Warwick Shore Advisors. In a volatile market, it can be difficult to invest with confidence. However, the outlook for the future is not entirely grim.

The stock market forecast for 2019 and beyond

Although experts have made stock market predictions for 2019, it’s impossible to know what will actually happen. No one can foresee the unexpected events and conditions that will create changes in the market. The only thing we can anticipate are changes of some kind.

Keep in mind that attempting to predict the future can be the downfall of many investors. It’s tempting to try timing the market, but that can often be a risky investment strategy. Instead, use the stock market forecasts below as a jumping off point as you conduct your own research and decide which investments are best for your portfolio.

Short-term forecast

It’s not surprising that different experts have different opinions about the market’s outlook. Even predictions about the next year vary greatly.

According to a CNN report, Morgan Stanley equity strategist Michael Wilson predicts that we are currently entering a bear market, indicating a downturn in the market. However, other investment giants like Goldman Sachs disagree. Their official outlook predicts that the S&P 500 will continue to grow slowly with more choppiness in 2019, as reported by CNBC. Similarly to Goldman Sachs, Shelton said, “Over the next year I foresee moderate appreciation — however, the ride will be bumpy.”

An Eaton Vance survey of more than 600 financial advisors showed similar division: 54% foresee stocks to continue increasing in value, but many are concerned with the market’s volatility. More than a quarter of surveyed advisors think geopolitical issues and U.S. politics are drivers in market volatility, with another 22% pointing to the Federal Reserve’s decision to raise interest rates as a contributing factor as well.

Other factors that could sway market predictions for 2019 include rising wage costs, slowing U.S. GDP growth and a falling growth rate of the S&P 500. It’s unclear how significantly these factors will affect the growth of the market in 2019, but many investors agree these developments will slow growth to some extent.

Long-term forecast

Making accurate stock market predictions for the next year is difficult, but creating a forecast for the long-term is even harder — so many factors can change between now and then.

With the average historical returns of the market around 10%, it’s tempting to assume returns will remain high. However, Kenneth Melotte III, founder of Melotte Financial Advisors, warned against that. “I caution anyone against assuming U.S. stocks will provide returns remotely close to the 10% long-term historical average return over the next ten years.”

The strong cautionary words were founded in Melotte’s belief that “the potential downside in the next bear market is quite large, as losses may exceed 50% or even 60% from the ultimate peak based on the current level of the most reliable valuation metrics.”

Yet Melotte was quick to note that market forecasts really are “a guess … no matter who is making the prediction.” Past performance has shown that long-term investments are typically less risky than short-term investments, but it’s important to carefully assess one’s risk tolerance before deciding to invest.

Final thoughts

Remember, predicting the future is impossible. The only sure thing is that the market will change — whether it rises or falls has yet to be seen.

One way to help protect yourself from the inherent volatility of the stock market is to diversify your investments and continue to invest on a regular basis. If you’re nervous about investing or aren’t sure where to start, consider consulting with a licensed financial professional to get specific advice for your money.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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What’s the Average Stock Market Return?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

hundred-dollar bills and stock market data/chart


Most people know that investing money is an important component of long-term financial success. However, the stock market can seem overwhelming to a new investor.

Before you decide whether investing in stocks is the right choice for your financial future, familiarize yourself with the long-term trends of the market. Educating yourself about the average stock market return is vital to responsible investing. A better understanding of these long-term trends should help make buying your first stock easier.

Average stock market returns over time

In order to measure the changes in the stock market, investors typically refer to the S&P 500. The S&P 500 is a collection of the 500 largest publicly traded companies in the U.S. based on market value.

If you’re an investor, it’s unlikely that your portfolio will mimic the exact pattern of the S&P 500. In order to create the exact same returns, your portfolio would need to include each of the 500 companies included in the index. However, it’s not necessary or practical to invest in all 500 companies individually as a new investor. Instead, the wide scope of the S&P 500 can be used as a relatively accurate benchmark for the market as a whole. This information can allow you to make more informed investment decisions.

Since 1928, the S&P 500 has had an average annual return of 11.53%. Over the last 50 years, the average S&P 500 return was nearly the same: 11.65%. Look at a shorter time frame, however, and the average return decreases. Over the last 10 years, the average stock market return was 9.83%.

When you look at the broad overview of the S&P 500, the average return seems to grow consistently. However, that growth is not guaranteed.

Don’t count on earning the average return

Even though the average stock market return seems to show consistent growth, you should not plan on earning the average annual return each year.

The average trend of the stock market is to increase over time, but that’s not always the case on a year-to-year basis. For example, in the midst of the Great Depression, the annual return of the S&P 500 dropped to -43.84% in 1931. In 1954, by contrast, the annual return of the S&P 500 increased to 52.56%. Investors could not easily predict these swings.

Source: Macrotrends

Due to this unpredictability, it’s possible that you could lose money, especially in the short term. In fact, it’s likely that your investments will experience a dip at some point. However, that’s the nature of the market. Before you invest your money, prepare yourself for the inevitable drops.

As you look at the stock market returns by year, also consider other factors that will affect your overall gains. Inflation can diminish the value of your returns, for example, and investment fees can physically cut into your returns. The results of both lead to a decrease in purchasing power.

How to invest wisely

Even with the fluctuations in the market’s returns, it may be a good idea to invest your money. If you are investing your hard-earned money in the stock market, then you will want to know how to maximize your money. The goal of investing in the stock market is to have your money work for you.

Here are some guidelines to keep in mind when creating your investment strategy.

Invest for the long term. While you do have the option to invest your short-term savings, the unpredictable fluctuations in stock market returns could create losses. In theory, these fluctuations likely would average into long-term growth over time. However, if you invest your money for only a few years, then there’s a greater chance you could experience poor returns.

Don’t panic. When the market drops, it can be extremely tempting to sell. Rather than lose the rest of their investments, some investors may instinctively get rid of their stocks when there is a downturn in the market. However, selling out at every dip in the market likely will negatively affect your long-term gains.

Avoid high fees. It’s an unfortunate reality: Fees are a part of investing. You can limit your fees by choosing an investment firm that consistently offers low fees. Vanguard and Fidelity, for instance, are reputable investment firms known for their low fee structures. Shop around and compare costs before deciding which firm will manage your investments.

Balance your portfolio. As you progress through life, your goals and needs will change, so it’s important to balance your portfolio with the appropriate amount of risk along the way. For example, younger people often carry more risk in their retirement portfolios; if the market takes a tumble, they have decades to wait for it to recover before they’ll need to use that money. As you inch closer to retirement, however, you may decide to reduce your investment risks since you plan to use the money sooner.

Get started

Although you shouldn’t neglect other financial goals, such as paying off debt or building an emergency fund, creating an investment portfolio is important for your future wealth.

The best way to start investing is to save up for an initial investment. Your savings goal will depend on which firm you choose to work with because some will have higher investment minimums than others. Once you have saved your initial investment, you can take the leap into investing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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How Brokerage Accounts Work

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

You’ve saved up a healthy emergency fund and have a handle on your debts — what’s the next step in your financial journey? For many, learning how to invest their spare cash is a good financial move.

But taking that step can be hard, and the number of investments options you have may seem overwhelming. However, if you’re ready to start investing, consider opening a brokerage account.

What is a brokerage account?

A brokerage account is a means for investors to invest in the stock market. Brokerage accounts are operated through licensed brokerage firms. Through the account, investors can deposit funds and buy investments. The types of investments usually purchased through a brokerage account include stocks, mutual funds and bonds.

Once you set up a brokerage account, you will be able to buy and sell investments through the account. Although the account is through a firm, the investor will be the owner of the account’s assets.

Think of your brokerage account as a gateway to investing. Through the account, you will be able to make purchases and trades. The amount of flexibility you have within your account will depend on the firm you choose to work with. Let’s take a closer look at the most common requirements of these accounts.


Each brokerage firm will have a slightly different structure, but every firm will include fees of some kind. The most common fees are outlined below. Before you get started with a brokerage firm, you need to understand the fee structure.

  • Brokerage fee. An annual or monthly fee that is charged to maintain your account. The fee could include add-ons, such as access to specialized research. The fee may be a flat fee or standard percentage; some firms enforce a combination of both.
  • Transaction fee. Every time you buy or sell a stock, you will be charged a fee. It is typically a flat fee, but the amount will vary by firm. These fees can add up quickly if you make a lot of trades. Transaction fees can also apply to mutual funds.
  • Management fee. When your account is managed by a broker, they will charge a fee for that maintenance. The fee is typically a percentage of the total assets managed by the advisor. The more involvement provided by the brokerage firm, the higher the fee.

Account minimums

Many firms have account minimums in place, though the exact amounts vary widely by firm. Some accounts will require thousands of dollars as a minimum, while others will require only a small amount. Typically, accounts that offer smaller minimums will require you to make regular deposits. If your balance falls below the minimum, you will likely be charged a fee.


Brokerage accounts do have some limitations on who can open them. There are some basic requirements to meet, such as requiring account holders to be 18 years or older and have the money to fund the account. Both of these are fairly simple to achieve.

Depending on the brokerage firm you choose to work with, there may be other hoops to jump through. Some require more information about your employment status. Others may ask questions about your net worth. Be prepared to answer a variety of questions when you fill out the application.

Cash or margin

When you sign up for a brokerage account, you often have the choice between a cash account or a margin account. A margin account will allow the broker to lend money to the investor in order to finance investment purchases.

You will need to determine whether you want to purchase your investments with saved cash or through a loan. Typically, a cash account is a safer, cheaper option for new investors.

What to look for in a good brokerage account

The number of available brokerage firms is substantial, but don’t just choose one randomly. In the long run, it’s vital that you find the appropriate brokerage firm for your needs. Otherwise, you may be paying too much for services you don’t use.

You should be able to find one that fits your needs with a little bit of research. Before you commit, consider these factors.

Choose between a full-service broker and a discount broker. A full-service broker provides a more personalized service to each customer. You should expect access to extensive research, specialized advice and more. A discount broker allows you to perform trades but offers less personal advice. The advantage of a discount broker is that the fees involved are substantially less.

Compare the fees. Research the fees levied by each firm. Think about the frequency you plan to trade and the account balance you would like to maintain. The fees associated with each could add up quickly if you choose a bad match.

Investment opportunities. Not every brokerage firm offers every type of investment. Choose a firm that offers a variety of investment vehicles that suit your needs.

Educational resources. Some brokerage firms give you access to information about potential investment opportunities. As an investor, access to the right information can be critical to success. If you plan to do your own research on investments, having organized information in one place is a time saver.

User experience. If you’re choosing an online brokerage firm, check out the website. You want the site to be easy to navigate and conduct business through. You don’t want to sign up for an account with a firm that has an outdated website.

Perks offered. Some larger brokerage firms offer incentives to sign up. Some firms offer cash bonuses for opening an account, for example, while others offer a certain number of free trades. Take advantage of an incentive if your needs align with that firm, but don’t choose a firm based solely on the new customer perks.

How to open a brokerage account

After you choose the brokerage firm, you will need to physically open the account. Here’s what you need to do.

Collect the paperwork. As with almost everything financial, there will be paperwork involved. You will need to provide some personal information which may include your Social Security number, driver’s license, employment status, net worth and more. The type and amount of paperwork will vary by brokerage firm.

Fill out the application. The application is usually an online process that takes a few minutes. Once you have filled out the application, you will need to wait for approval.

Fund the account. When your account is approved, you’ll need to fund it. You can use a variety of methods to fund your account, including an electronic funds transfer, wire transfer or check.

Research investments. When the account is funded, you will be able to make your first investment purchase. Before you order the purchase, do some research about the investment to make sure you fully understand what you’re buying.

Make a purchase. Finally, you can make a stock purchase through your investment account. After this step, you can continue to research and purchase investments in order to grow your account.

Final thoughts

Opening a brokerage account could be the next step toward your financial goals. Before you get started, weigh your options carefully.

The best thing to do is not rush into any quick decisions about your brokerage account. The right brokerage firm can significantly improve your investment experience, and a better experience can lead to a more productive investment account.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.