2019 Was a Big Year in the Stock Market – What’s Next for 2020?

Last week we talked about how 2019 was shaping up to be a great year for the stock market, rising about 30% for the year. Not too many people predicted that outcome a year ago!

The natural question is: what’s in store for 2020? We don’t know – nobody does.

But as I’ve mentioned before in this column, we can look back at history as a potential guide of what’s to come. Emphasis on the word “potential” …

Below is a list of all the years in which the S&P 500 Index generated Total Returns (price returns plus dividends) of at least 30%. The column on the right is what happened to the stock market the year AFTER those big gains.

Most market forecasters would argue that we’re due for a year of low returns – if not an outright correction – after having such a big year. But history hasn’t played out that way.

In fact, average stock market returns are a respectable +10.8% after a 30%+ gain the year before.

The debate about what the stock market will do in 2020 isn’t the critical question for you and your family as we head into the New Year. The real question you should be asking is, “Do we have specific and measurable financial goals in place for our family?” In other words, do you have a financial plan in place to achieve your family’s life dreams?

You can’t control what the stock market will do next year. But you can control how you prepare your family for the future.

Maybe 2020 should be the year you get that comprehensive financial plan put into place. Having a plan not only gives you a better shot at achieving those dreams and goals you have rolling around in your head. But it also brings peace of mind as well.

As we head into the New Year, we at Financial Design Studio want to wish you the best. And we want to invite you to take that next step and reach out to us. Comprehensive financial planning is what we do and what we’re passionate about! 

Wondering how this affects your future finances? Schedule a call with Financial Design Studio, financial advisors in Deer Park, to discuss your portfolio today.