The stock market has performed well not only over the past year, but since the beginning of 2017. Over this three-year period, the S&P 500 has risen by over 45%. Investors who were able to stay invested through the volatility of late 2018 and during turbulent periods of 2019 have been rewarded.
Stock markets are riding high as we approach the end of 2019. The S&P 500 has returned nearly 30% with dividends, the MSCI EAFE index of developed markets is up over 21%, and the MSCI Emerging Markets index has gained about 15%. What's more, the largest pullback in the S&P 500 this year was only 7%. There are three key reasons for this outsized performance, and one important takeaway for investors as we enter 2020.
With the next presidential election less than a year away, many investors are bound to be concerned by the impact of politics on the stock market and economy. After all, the past three years have been politically turbulent to say the least. Even as we write this, Washington is in the midst of an impeachment hearing. On a short-term basis, headlines and tweets have the power to move markets and create stock market volatility. How should investors react to what may be a bitter presidential campaign?
After over a decade of steady growth, it's not unusual for the economy to be slowing. Throw in a mix of global issues such as trade wars and central bank activity, and it's no surprise that markets have been choppy over the past year. While there may continue to be market uncertainty, it's more important than ever for long-term investors to maintain perspective on how far both the economy and stock market have come since 2008.
Have you ever wondered how much money you can put into each type of retirement account? Do you want to ensure you are maximizing your potential tax-benefits in retirement? The answer isn’t complicated, but it has changed for 2019. Starting January 1st, you can now contribute more than ever before to certain types of retirement accounts.
Investing your money isn't just about choosing the right investment vehicles. Choosing where you invest your money is equally important. Find out more about all three tax pockets here!