By: Zachary Bouck, CFP®
Another month, another fluctuation in the stock market.
Source: Ycharts
When we look at the S&P 500’s performance over the past 50 years (from 1950 to 2024), the average annual return has been 11.48%. Breaking it down by month, this translates to roughly a 1% return per month (though this is a simplification for conceptual purposes). Historically, September has been the weakest month for stock returns, while October, November, and December tend to align more closely with the average 1% return.
Source: officialdata.org
So, given September’s tendency for volatility, is now a good time to invest in businesses through the stock market?
If you're focusing on the next 12 months, be prepared for some turbulence. While economic data isn’t disastrous, it’s not particularly encouraging either. The job market is cooling, which often signals a slowing economy.
However, if you can look beyond the next year and focus on the next 5 years, the outlook is much more promising. Developed economies around the world continue to innovate and grow. Here are a few major projects currently in development that I find particularly exciting:
We’re also just now figuring out what to do with all the computing power we have.
Source: The Wall Street Journal
Unlike the internet bubble of 2000, today’s platform companies are not only profitable but also poised for continued growth.
Stock market investments are inherently long-term commitments, and despite short-term uncertainties, the future remains bright.
Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Stock investing includes risks, including fluctuating prices and loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
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