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Vlog: Dave’s 2020 Outlook


It’s that time of the year – The time when my email box gets flooded with all the 2020 outlooks. I’m guessing you are getting them, too.


Everyone is publishing their price targets for the upcoming year, and every year we see tend to see the same old thing…every 2020 outlook is for a positive, mid-single-digit percentage return in the equity markets.

On the surface, great, take a guess and publish it…it’s fun.  I mean I guess there is some expectation for strategists to publish SOME SORT of 2020 outlook.

But here’s the deal: the fact that these strategists are, for the most part, predicting a positive return in the mid-single-digit range for 2020 is no surprise since mid-single-digit returns roughly line up with historical equity market returns.

In other words, as far as guesses go, it doesn’t get much safer.

Let’s break this down a little…

First, no one remembers a guess that’s similar to what returns have been on a historical basis.  It’s safe and totally forgettable. If the stock market does end up doing much better than that, the strategist can still say he or she was positive.  No one gets fired for predicting an 8% return when the market is up 18%. Alternatively, if the market goes down, they can say that their prediction of mid-single-digits indicated they had some concerns heading into 2020.

I’ll sit down and write a longer form blog on this topic, but let me tell you a few pieces of data from Bespoke that highlights that these predicted results, while seemingly conservative and safe, are actually more uncommon than you would think.

Going back on the Dow 120 years (back to 1900):

  • Only 21 out of the 120 years (17.5%) have been positive, single-digit returns. That means that over 80% of yearly returns for the Dow since 1900 have not been in the “safe-zone” range that’s most preferred by strategists.
  • Looking at it another way, there have actually been more years where the Dow has been down over 10% (11 years + 12 years = 23 years) than there have been years where it was up by single-digit percentages (21).
  • Finally, if a “safe” prediction is what a strategist is looking for, They should really be forecasting a gain of 20%+ because in the 120 years since 1900, gains of 20% or more have been over 50% more common for the Dow than single-digit percentage gains (33 versus 21).

SO, what’s my prediction? +8%.  Haha.

Have a great holiday season.  If you are a client, I just want you to know on behalf of everyone here at Monument, we appreciate your trust and confidence in us.  Regardless of our fun nature, we do not take our responsibility lightly.  For everyone else, we appreciate you tuning in to all of our opinions over the year and hope you enjoy them in 2020 as well.  We are running with some thin coverage over the few days between Christmas and the weekend so please be sure to give us as much heads up on anything you need as possible.

Happy Holidays and see you in 2020.


P.S. Here’s what we were posting this time last year:


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David B. Armstrong, CFA

President & Co-Founder

Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....

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