2013 was a memorable year for investors. There was a phenomenal rise in the market of about 30% in profits as stocks surged to an all new record high. Until the very last weeks of 2013, bull bear ratios signaled a strong bull market and as the year ended, the million dollar question that every investor and promising investor is spoken ever so fervently: will the stock market continue to rise in 2014? Are the record profits of 2013 enough to increase confidence in the market for the next year?
There are several signs that 2014 will still be a strong year for the aging bull market. If you are a new investor or you don’t want to take risks, check out these hints that are telling you about investing in the year 2014:
Comparing 2014 from 2013
A regular slip-up that gurus of financial investment make is to pronounce that something must go down a great deal since it has gone up a considerable measure. Yet stocks at the finish of 2013 don’t remotely look as unreasonably rich as they did at the close of 1999. The S&P 500 is exchanging at 15 times income gauges for 2014, a sensible valuation acknowledging that experts are foreseeing profit development of more than 10% one year from now.
The economy has telltale signs
The economy will continue to improve in 2014 and this is evidenced by the gross domestic product increasing to a rate of 2.6% compared to an estimate that was given to 2013 at only 1.5%. There will be higher wages as personal income rises to 3.5%. The unemployment rate may not be more than 7.2% this year since there will be more people that will decide to go back to work. All of these figures point to a stronger economy; these are also signals that it is less risky to invest this year.
Less confidence in bonds
Hey say that 2014 is not a year for bonds; experts predict that stocks could increase another 10% to 15% this year which may lead to investors abandoning investing in bonds. This phenomenon was also observed in 1994 when interest rates soared due to a strengthening economy. Looking back at the yields for bond investment this year, surges have been prevalent in May from a low of 1.6% to about 3%. And because of these investors have taken money out of their bond fund to invest in a more reliable and profitable stock market.
Growth is all around us
Almost every country has become a player in the market last year. China is following European countries in the charts and of course this is pressuring US companies to do their best. At present shares of large multinational companies have the biggest shares on the Dow and S&P 500.
Investors are gaining confidence in the market and those that have suffered from the fall of the stock market in 2008 are now starting to invest again thanks to a strong bull market that will surely be stronger this new year.
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