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S&P 500 (SPX) Forecast for 2021, 2022-2025 and Beyond

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The consequences of the COVID-19 pandemic are negatively impacting many companies worldwide. Many of these companies have already cut, postponed, or canceled their dividends. They do this to save capital.

Within the S&P 500, 12 companies reduced dividend payments on March 30, 2020, or decided not to distribute at all. While some companies have lowered their dividends, another group of companies within the S&P 500 is expected to increase payouts.

Today’s savings interest rate is no longer yielding anything, and many banks have almost reached 0% savings interest. In combination with annual price increases, your savings will be worthless. Index investing can offer a solution for saving. In this article, we discuss a specific index, namely the S&P 500 index (SPX).

We’ll tell you everything you need to know about the U.S. stock market index S&P 500. Will the price of the S&P 500 go up? How much will the stock index cost? Let’s find out in this S&P 500 forecast!

The article covers the following subjects:

About the S&P 500 Stock Index

In 1923, the Standard and Poor’s 500 stock index credit rating agency began compiling the S&P 500 index. This index includes 233 companies from the United States. It initially had a weekly count but was changed to a daily one in 1926.

In 1957 the S&P 500 index was expanded by Standard and Poor’s to 500 companies. From that moment on, the index was better known as the S&P 500 index, or simply SPX.

In the early stages of the S&P 500 index, a specific number of companies per sector were included in the index. This was discontinued in 1988, and since then, the S&P 500 consisted of the 500 largest publicly-traded companies in the United States.

The S&P 500 index is compiled based on the market value of US stocks. This makes it easy to adjust the list every year.

The S&P 500 index now consists of the largest companies from more than 90 sectors. Therefore, the index is a good reflection of the state of the economy of the United States.

The weighting of the companies within the index is related to the stock market value of a company. In the case of the S&P 500 stock (stocks), Apple is the most valuable company, accounting for 3.25% of the index’s total value.

Other companies that have considerable weight are the S&P 500 stock of Alphabet A + B (Google), Microsoft, Amazon, AT&T, and Facebook, among others. The top 10 of the S&P 500 indices account for just over 20% of the entire index.

Because the S&P 500 index is a good reflection of the United States economy, it makes it a very popular index among economists and investors.

The SPF price for today is 4 524.9 US Dollars.

Top Factors That May Impact S&P 500 Now and, In the Future

When investing in the S&P 500, it is important to remember that the weight of stocks has a significant influence on the price. The largest shares sometimes count ten times more than the smallest shares.

Therefore, a change of course for the largest ten companies has a relatively large impact on the course of the S&P 500 index.

Since 1987, circuit breakers have been entered on the S&P 500 index. This decision was made on Black Monday because the stock market fell by as much as 20.47% in a short time. When the prices fall by 7%, 13%, and 20%, trading is stopped for a quarter of an hour.

The break allows investors to properly analyze the situation. In this way, the first panic reaction can be countered so that the stock market collapses less quickly in the event of bad news.

The index can be affected by acquisitions, divestitures, the covid pandemic, trade wars, political issues, restructuring, and dividend payments – not just a company’s performance.

Pros and Cons of Investing in S&P 500

Did you decide to opt for S&P 500 as a novice investor? Then you must, of course, know what the advantages and disadvantages of this investment product are.

The advantages are:

  • Thanks to the leverage effect, investments can be made in small amounts.
  • Profits can be achieved in both a falling and a rising stock market.
  • The profit opportunities are greater than with direct investments.
  • Novice investors can easily start trading indices, bonds, or commodities.
  • Trading continues almost continuously, five days a week. Investors, therefore, almost always have the option of protecting a position taken by setting a stop loss.
  • Investors can hedge their investment portfolio with futures. For example, did you buy shares? By also investing in futures, you can partially cover the financial risk of those shares. How? By taking short positions. By taking short positions against the shares you have bought, the market risk is partially hedged.
  • The leverage (at LiteFinance) makes it possible to make an optimal profit if there are changes in the underlying asset price.

The drawbacks are:

  • Using leverage does not only lead to profit. Of course, a loss can also be incurred when using leverage. This loss can add up quickly. This form of investing is riskier than investing directly in, for example, shares.
  • Remember that with futures, you can lose more than your investment.
  • Trading CFDs successfully? You must then keep a close eye on your positions, given the long opening hours and the leverage. So, you need a lot of time to be able to follow daily (chart) developments.
  • The stock market is initially very volatile.
  • The value is highly dependent on the market value of companies from the index.
  • The list of companies is changing.

S&P 500 Price Future Predictions for 2021 by Experts

Most Wall Street analysts are optimistic about 2021, expecting the leading S&P 500 index to close 2021 with a profit. This is according to an S&P 500 forecast survey conducted by CNBC among 20 analysts from the largest financial institutions on Wall Street.

The stock market experts predict a gain of between 8% and 22% for the S&P 500 for next year.

Twelve of the twenty respondents expect the S&P to rise to 4,000 to 4,500 points in 2021. Fourteen of the twenty analysts are ‘cautiously optimistic’ about 2021, three are ‘very optimistic,’ and three others are mainly ‘cautious’ because of S&P 500 historical trends. Currently, the index is already at .

New Record-Highs in 2021

The optimistic analysts have high hopes for the rollout of the coronavirus vaccines, which started in the United Kingdom. This group also assumes that Washington D.C. will develop a second corona support package for the U.S. economy. These developments are expected to lead to a recovery in corporate earnings and economic growth, which is good for the US 500 forecast.

“We believe that low interest rates, coupled with a recovery in earnings in the S&P 500, will cause equities to hit new highs in 2021,” said an analyst. Another stock market expert made an S&P 500 forecast showing a 15% rally in the stock markets if the world returns to the old normal.

S&P 500 (SPX) Technical Analysis

Let us start the S&P 500 technical analysis with exploring the global trends that have the greatest influence on the price movements.

The monthly SPX price chart shows a clear multi-year bullish trend that has been hitting new highs since March 2020. To carry out a thorough technical analysis, let us attach the Fibonacci channels to the price chart and define the key phases of the trend development.

There are four general zones:

  1. 0 – 0.236 is the zone of the trend start;

  2. 0.236 – 0.382 is the consolidation zone, whose upper and lower borders are strong support and resistance levels;

  3. 0.382 – 0.786 is the zone of the strong price momentum;

  4. 0.786 – 1 is the zone of the highest values.

In late 2021, the SPX price chart broke through the psychosocially important level of 4500 USD and then corrected towards the zone of 4100 USD. This movement confirmed the zone of highs. This is the blue zone in the above chart. The SPX has been in the zone of price highs. So, if the market doesn’t show buying pressure, the SPX future price should be declining over the next one or two years.

SPX price prediction for next three months

To make up a realistic prediction chart for the SPX, we need to analyse the market situation in different timeframes. Let us continue the technical analysis of the global trend and explore the daily chart to predict the future price and define the S&P 500 projected growth target for the next three months.

 

The MACD signals a reversal signal, the signal line crosses the indicator line. So, it could be assumed that the short-term upward correction will continue until the SPX price reaches the border of the blue zone of the price highs, level 4650 USD.

Next, if the price doesn’t consolidate in the fourth zone, there could increase selling pressure and cause the S&P 500 future value to actively decline. This signal is confirmed by the price movement crossing the support at 4100 USD, formed during the record trading activity in late February 2022, which has good potential.

The expected bearish movement could drive the price to the lower border of the Fibonacci zone 3. If the market situation won’t radically change, the chart will approach zone 3 already in April or May this year. Next, there should be technical consolidation and a possible bullish correction. The further SPX index outlook will depend on whether the bulls managed to consolidate the price above 4000 USD. If they fail, the S&P 500 bearish trend will resume. 

Long-term S&P 500 price forecast for 2022-2023

To provide the projected price changes in the long term, I would explore the index price history using the Bollinger Bands indicator.

I discovered some patterns in the changes of Bollinger Bands width and drew monthly price projections for the scenario I described above. The projections look like orange boxes in the prediction chart above.

S&P 500 price must be trading in the growth zone with a tendency to decline before early summer. Fundamental analysis and US domestic data suggest that the global economic crisis could exacerbate already this summer.

The growth of energy prices and supply chain disruptions will further accelerate global inflation. Interest rate hike won’t be effective under such conditions, rather, it will put another pressure on the US economy, closing access to cheap money for large enterprises and representatives of medium and small businesses. At the same time, with rising prices, purchasing power will suffer, pressing down consumer demand, which will also weaken businesses. The conditions are set for economic turmoil, which suggests a bearish SPX prediction.

Already in the summer, we can expect a wave of commercial enterprises defaults. So, the price could break out the lower border of the growth zone and go to the range of 3200 – 3600 USD. The future value of the S&P 500 could be trading in the indicated zone until autumn due to possible buybacks and direct government assistance to system-important companies. However, it cannot be ruled out that we will see a retest of the global long-term trend. In this case, the projected price target for the bearish trend will be in the zone of 2600 – 2700 USD.

According to technical analysis, the price could go below the above-indicated levels only if there is sufficient accumulation. Considering the trend potential, it could continue during the first half of 2023. The bearish movement could also accelerate if the geopolitical situation deteriorates.

Monthly S&P 500 price predictions

The table below presents likely ranges of the S&P 500 for 2022 and early 2023, according to the SPX analysis. I specified the expected minimum and maximum for each month.

Month

SPX to USD price 

Minimum $

Maximum $

March 2022

4100

4550

April 2022

3500

4200

May 2022

3500

4000

June  2022

3100

3700

July 2022

3200

3700

August  2022

3000

3600

September 2022

2850

3200

October 2022

3000

3300

November 2022

2700

3200

December 2022

2600

2900

January  2023

2700

3200

February 2023

3000

3400

Long-term SPX trading plan

Based on the S&P 500 forecast and technical analysis above, I offer a trading plan to make profits with low risks.

As the SPX rate should be trading down in the long-term trend, I suggest going short even though the global SPX trend remains up.

Aggressive traders could enter shorts now, at the market price around 4500 US dollars. If one wants to enter a safer trade, they should expect a rebound up to 4600 USD, blue line in the above chart.

A stop-loss could be set above the last local high, that is, above 4800 USD. After the price reaches a breakeven zone, I recommend enabling a trailing loss, to lower the risks of counter-trend trading.

The projected target of the suggested correction is close to the border of the global trendline. A possible take profit level around 2800 USD is marked with a green line in the above chart.

Follow the risk management rules, take care of yourself and your money! 

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The S&P 500 price technical analysis is presented by Mikhail Hypov.

S&P 500 Forecast 2022 – 2023

Below is an S&P 500 prediction chart for 2022 and the beginning of 2023:

Year Mo Min Max Close Mo,% Total%
2022 Jan 4793 5405 5099 5.0% 35.1%
2022 Feb 4553 5135 4844 -5.0% 28.4%
2022 Mar 4326 4878 4602 -5.0% 21.9%
2022 Apr 4319 4871 4595 -0.2% 21.8%
2022 May 4442 5010 4726 2.9% 25.2%
2022 Jun 4550 5130 4840 2.4% 28.3%
2022 Jul 4745 5351 5048 4.3% 33.8%
2022 Aug 4724 5327 5025 -0.5% 33.2%
2022 Sep 4707 5307 5007 -0.4% 32.7%
2022 Oct 4942 5572 5257 5.0% 39.3%
2022 Nov 4694 5294 4994 -5.0% 32.3%
2022 Dec 4786 5398 5092 2.0% 34.9%
2023 Jan 4895 5519 5207 2.3% 38.0%
2023 Feb 5070 5718 5394 3.6% 42.9%

Source: Longforecast

Long Term S&P 500 Forecast 2025-2030

It’s not realistic to make such a long-term S&P 500 forecast. However, we can say that when extending the best-fit line and the prediction bands, then the S&P-real end of December 2030 value would be 4,549, while the highest and lowest values shown by the prediction bands would be about 8,780 and 2,360, respectively.

Source: marketsignals.com

Thus, the historic trend and price history produce a long-term price prediction of a 2.1% annualized return for S&P-real from its current level of 3,906 to the end of 2030. The worst-case scenario would be a possible annualized return of -4.4%, and the best outcome could be an annualized return of 9.0%.

How Has the Price Of the S&P 500 Changed Over Time?

Since the creation of the S&P 500 index, the S&P 500 price has risen enormously. Mainly from 2011, the price of the index has risen enormously. The question is – how to analyze S&P 500 forecast?

The price of the index fell significantly in 2003 and 2008. This is because the S&P 500 index is a good reflection of the United States’ economy during those periods of an economic crisis.

Source: macrotrends.net

The 5-year chart shows the S&P 500 projections of the S&P 500 index. At the beginning of 2020, the S&P 500 price was around 3400 points. In March, the rate plummeted to about 2191 points.

The S&P 500 index has rebounded nicely from this loss in the rest of the year, closing 2020 with over 3,750 points. The current price of the S&P 500 is USD. 

Use These LiteFinance Tips to Become a Successful Investor

Before investing in the S&P 500, check out these recommendations.

  • Do your research. Take the time to research the pros and cons of investing in the S&P 500, as well as the different methods you can use to invest in the S&P 500. Having an S&P 500 outlook in advance will improve your chances of success.
  • Establish a budget. Establish a budget that suits your lifestyle and risk tolerance. You don’t want to be in a situation where you suffer such a loss that it affects your confidence and ability to act in the future.
  • Select the correct platform. Consider all of the options available and choose the one that best suits your investment needs.
  • Grow your investments gradually. For beginners, it may make sense to invest a smaller amount to start with. You can always invest larger amounts as you gain experience and expertise.
  • Think about the long term. Investing in index funds is often a long-term strategy, which can be used to take advantage of months or even years of profit, as the major index funds aim for consistent, steady projected growth over time.

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What Is the Future Price of the S&P 500? Is S&P 500 a Good Investment?

The S&P 500 index is a globally popular index, if not the most popular. The S&P 500 index consists of the 500 largest companies in the United States from more than 90 different industries.

This makes the S&P 500 index popular not only among investors but also among economists. The S&P 500 is a good reflection of the economy of the United States.

The biggest advantage of investing in an index over an individual stock is diversification. With the S&P 500, you spread your risk over 500 stocks instead of just one, making your investment less sensitive to volatile price movements.

Below is an S&P 500 forecast chart for 2021:

Year Mo Min Max Close Mo,% Total%
2021 Feb 3699 4171 3935 4.3% 4.3%
2021 Mar 3857 4349 4103 4.3% 8.7%
2021 Apr 3875 4369 4122 0.5% 9.2%
2021 May 3973 4481 4227 2.5% 12.0%
2021 Jun 4172 4704 4438 5.0% 17.6%
2021 Jul 4035 4551 4293 -3.3% 13.8%
2021 Aug 3868 4362 4115 -4.1% 9.0%
2021 Sep 4062 4580 4321 5.0% 14.5%
2021 Oct 4264 4808 4536 5.0% 20.2%
2021 Nov 4348 4903 4625 2.0% 22.6%
2021 Dec 4565 5147 4856 5.0% 28.7%

Source: Longforecast

But while investing in the S&P 500 index is generally a safer investment, it also has its flaws, such as that all index funds often fall sharply when a bear market develops. While you are invested in multiple stocks, returns are also mirrored when the United States makes certain decisions about whether the U.S. dollar is going down.

Before purchasing an investment asset, consider all risk and reward factors, including any investment product associated with the S&P 500.

If you think investing in S&P 500 is something for you, do it with a reputable exchange/broker. A good example of this is LiteFinance. A great reason to create a free demo account on LiteFinance!

LiteFinance has fact-checked information and a user-friendly platform with an outlook for novices as well as experienced traders and investors.


S&P 500 Price Prediction FAQs

Disclaimer: The information in this statement is not intended as individual investment advice and should therefore be seen as an investment recommendation. This recommendation has been drawn up by LiteFinance and/or third parties and does not match your personal financial situation, your knowledge and experience, your investment objective and/or horizon, and your risk profile and/or tolerance. You are therefore responsible for correctly assessing whether this investment is suitable for you in relation to your financial situation and your investment objectives.

Price chart of SPX in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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