How Much Money Can You Make Investing in the S&P 500 through 2030
With the year wrapping up, it’s time to check out the TNFG S&P 500 year-end predictions.
Looking beyond 2024, there is bound to be more inflation. Monthly market shifts particularly with AI and the Baby Boom retirement crisis, offer unique challenges. Prepare for even more stock market volatility based on riskier bets, and wilder crypto plays.
Veteran investor, David Roch warns that a “bear market is coming in 2025 if the Federal Reserve doesn’t step in. A 32% drop in crypto? Some people have been giving these most unhinged opinions since 2019. How likely all of it will play out? Well here are my estimates.
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S&P predictions for the next 5 years
Although the third quarter of 2024 is hitting hard, there’s one direction left (sideways). Nearly $2 trillion in market value dropped in the first week of the Red September. With Federal rate cuts on the horizon, it is safe to assume that the index (S&P 500) will rally. Yet, it’s still difficult to predict how much with elections, shutdowns, and global demand.
Based on prior market returns, I’m wagering anywhere from an additional 5% to 12%.
Worry less, since the market generally bounces back (eventually). The market is indifferent. The business cycle rebalances job losses, pandemics, and even wars. The best you can do is to change as society changes. If inflation is higher on some goods, switch up your diet.
“Money will money.”
The beauty of the U.S. economic system (i.e. S&P 500) is that it attracts international cash inflow. It is trusted. The index is a benchmark. Looking at the charts gives us an idea of when a pullback like 2022 may happen. As China pulls itself out of its real estate recession, the hope is that manufacturing and purchasing will go up. By the time we get to 2030, some of the current conflicts should find a resolution. This will lead to new all-time highs.
Financial pundits believe the index will be as high as 10,000 by 2030. The US dollar is still strong. However, real potential GDP is projected to grow slower than before 2008. Due to a slowing and aging labor force, we have to hope that AI and (net) immigration fill in the gaps.
Stock market forecast for the next decade
Since 1947, the S&P 500 has produced roughly 8% annual gains.
The current environment may seem historically high for new investors, however, it’s not. The price for a new investor always seems high until you become the old seller. That’s the point of capitalism. You want prices and wealth to climb with assets.
Bank of America is targeting the S&P 500 5,150 to 8,700 with its S&P 500 price forecast for 2030. Yardeni Research sees DJIA at 60,000, and S&P 500 at 8,000. Some others are calling for a move as high as 10,000. Fundstrat’s Tom Lee says it will soar 175% to 15,000.
Either way, with a 70% chance of returns between 2% and 11%, Goldman Sachs is 87% sure stocks will outpace inflation.
So, what is the future of the S&P 500?
While most American households feel relatively poor at the checkout, the markets and the economy are in a position for growth. The question falls to how to use your income from paycheck to paycheck. This will not be a slam dunk. We will have to work for every inch of future wealth wins.
A drop in the market should be expected.
It doesn’t matter if it’s 10% or 30%, those with enough cash liquid can buy great companies cheaper. The pandemic showed us that there is little warning when it comes to change. It’s best to stay prepared so you don’t have to get prepared when the moment comes.
The knowledge is the true economy, and the market is merely a trade of time (money). Those who understand that, win in the long run. So take advantage of the lows of the markets, as we wait for better future returns.
Average S&P Monthly Performance from January 1928 through December 2023
| Average Since 1928 | 20-Year Average | 10-Year Average | 5-Year Average | |
| January | +1.16% | -0.09% | +0.30% | +1.60% |
| February | -0.14% | -0.14% | +0.03% | -1.83% |
| March | +0.57% | +0.95% | +0.01% | -0.31% |
| April | +1.38% | +1.97% | +1.94% | +3.20% |
| May | -0.11% | +0.16% | +0.75% | -0.09% |
| June | +0.76% | -0.25% | +0.92% | +1.73% |
| July | +1.71% | +2.17% | +2.95% | +4.00% |
| August | +0.63% | -0.27% | +0.08% | +0.19% |
| September | -1.17% | -0.81% | -2.31% | -4.22% |
| October | +0.52% | +0.67% | +1.35% | +2.04% |
| November | +0.97% | +1.94% | +3.44% | +4.98% |
| December | +1.31% | +0.66% | -0.31% | +1.40% |
Now Answer the Question of the Post?
So how much can you make on the market if you invest $1,000 through 2030? My guess is a nice +68% or an annualized average of 11%. If you invested $10,000 at 11% annually with no extra dollars, you would have $18,704.15. Consider if you have a $500,000 portfolio, it would grow to nearly $1 million. Even at an 8% historical average, you would be up nearly $800,000.
It pays to invest. The earlier you start and the longer you go, the better the outcome. Prior results don’t guarantee future results. And try not to gamble on BIG wins while not accounting for BIGGER losses. In the end, it will all come down to your long-term goals. You need a reason WHY. If not, all of your investments would be reduced to paper wins and taxes.
Bonus Content: check out this Free Roth 401k vs Traditional 401k Retirement Calculator for 2024
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