Stock market watch: What to expect from the week ending September 10, 2021 (2024)

FAQs

What return should I expect from the stock market? ›

The average stock market return is about 10% per year, as measured by the S&P 500 index, but that 10% average rate is reduced by inflation. Investors can expect to lose purchasing power of 2% to 3% every year due to inflation.

YTD return is the amount of profit (or loss) realized by an investment since the first trading day of the current calendar year. YTD calculations are commonly used by investors and analysts to assess the performance of a portfolio or to compare the recent performance of a number of stocks.

Monday would probably be the best day of the week to buy stock, according to a market theory called the “Monday or weekend effect.” The Monday effect says that the market will continue gaining on Monday if the market was up on Friday.

The expected market return is usually calculated as the weighted average of the returns on each asset in the portfolio. So, for example, if an investor wanted to look at the expected market return of the S&P 500, they would use the weighted return of the 500 stocks in the index.

Based on the stock market's historic performance, there's never necessarily a bad time to buy -- as long as you keep a long-term outlook. The market can be volatile in the short term (even in strong economic times), but it has a perfect track record of seeing positive returns over many years.

This is where the term 'Year-to-Date' or 'YTD' comes into play. It is a financial metric that measures the performance of an investment or portfolio from the beginning of the year to the current date.

S&P 500 3 Year Return (I:SP5003YR)

S&P 500 3 Year Return is at 20.44%, compared to 32.26% last month and 43.16% last year. This is lower than the long term average of 23.24%. The S&P 500 3 Year Return is the investment return received for a 3 year period, excluding dividends, when holding the S&P 500 index.

A good return on investment is generally considered to be about 7% per year, based on the average historic return of the S&P 500 index, and adjusting for inflation.

It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day.

What is the 10 am rule in trading? ›

Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour. For example, if a stock closed at $40 the previous day, opened at $42 the next, and reached $43 by 10 a.m., this would indicate that the stock is likely to remain above $42 by market close.

The month of September has been, on average, the worst month for the stock market going back more than a century.

The Big Money bulls forecast that the Dow Jones Industrial Average will end 2024 at about 41,231, 9% higher than current levels. Market optimists had a mean forecast of 5461 for the S&P 500 and 17,143 for the Nasdaq Composite —up 9% and 10%, respectively, from where the indexes were trading on May 1.

According to the 'the behaviour of stock prices on Fridays and Mondays' article published in the Financial Analysts Journal, the average return on Fridays is more than the next Mondays. In other words, Mondays usually have lower stock prices than immediate previous Fridays.

The agency forecasted Dow Jones will close in 2024 at 38818 points. The updated Dow Jones price prediction for the next 5 years is for the index to trade around 45,000 points.

General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.

Expectations for return from the stock market

Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns.

U.S. stock returns: 2023 optimism carries forward

This heightened optimism is on par with the positive outlook in December 2021, when investors anticipated a 6% stock market return for 2022. Investor expectations for stock returns over the long run (defined as the next 10 years) rose slightly to 7.2%.

Usually the implication is that they can expect, over a long time, a 10% return. Fortunately some ask, with some doubt, "Is a 10% return really reasonable?" It is not. While the average growth or return in the market (e.g., the S&P 500) is about 10%*, investors over time do not see that.