The current climate is impacting the Dow Jones, and the average forecast for the index in 2023 is not very optimistic.
Dear readers welcome to another episode of the Coinspeaker Advent Calendar. By now, most countries are already experiencing the chilly airs of winter and this reminds many that the Christmas holiday season is just around the corner.
It is true that everyone gets to celebrate, however, while children wallow away in excitement, investors are making a series of permutations on what to expect from the stock and broader financial market in the coming fiscal year. Will the economy still be laden with inflationary pressures? Will the stock market receive a new leap? What will trigger the next bull run in the crypto market? These among many questions are what will engulf investors’ minds.
In reality, there are tons of assets and commodities to invest in, but all have different levels of risk. The major US market index, the Dow Jones Industrial Average (INDEXDJX: .DJI) is one of the major. As a market marker, it tracks the performance of 30 of the biggest cap stocks that trade either on the New York Stock Exchange (NYSE) or the Nasdaq Global Select Market.
The Dow Jones has a combined market capitalization of $10 trillion, making it a relatively stable index when profiled and compared in terms of its volatility.
Per the build-up of the Dow Jones, investors can back the index rather than inject money into the individual stock. Some of the companies whose stock makes up the Dow Jones includes JPMorgan Chase & Co (NYSE: JPM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), and Boeing Co (NYSE: BA) amongst others.
But is a bet on the Dow Jones an ideal proposition for an investor looking to safeguard or recoup their funds a right one? Let’s find out how Dow Jones’ growth path has been over the past decade.
Dow Jones Growth History and Forecast for 2023
The Dow Jones Industry Average has performed relatively well since 2012 but it recorded intermittent annual declines of 2.23% in 2015 as well as a 5.63% slump in 2018. In the COVID-19 hot year, 2020, the Dow Jones closed the year up by 7.25% with its underlying stocks benefitting from the interest rates which the Federal Reserve pegged at 0% at the time.
However, the times are changing, and the Central Bank has taken a U-Turn in its monetary policy with consistent interest rate hikes to help curb the inflation that started building up in the second half of 2020.
The current climate is impacting the Dow Jones, and the average forecast for the index in 2023, according to Longforecast.com is outlined below:
- January 2023: 33610 down 2.28%
- February 2023: 35291 up 2.61%
- March 2023: 37056 up 7.74%
- April 2023: 35203 up 2.35%
- May 2023: 33977 down 1.22%
- June 2023: 35676 up 3.72%
- July 2023: 33892 down 1.46%
- August 2023: 33723 down 1.95%
- September 2023: 32037 down 6.86%
- October 2023: 33503 down 2.59%
- November 2023: 31828 down 7.46%
- December 2023: 31011 down 9.84%
As shown above, more headwinds lie ahead for the major index, and investors looking to make a bet on it will need to use the coming fiscal year as a perfect entry point for a more long-term growth expectation.
We hope you got some insight on today’s episode of the Coinspeaker Advent Calendar, stay tuned for another information piece tomorrow.