By
Godfrey Benjamin
April 26th, 2024
Different forecasting platforms drawing insights from leading market experts are projecting something that looks like a doomsday fiscal year for the Nasdaq Composite.
Dear readers, welcome to another episode of the Coinspeaker Advent Calendar where we shine our beam on another major US stock market indices – the Nasdaq Composite in 2023.
The Nasdaq Composite (INDEXNASDAQ: .IXIC) is a very pivotal index that shines a beam into the performances of tech stocks trading in public US bourses including but not limited to Meta Platforms Inc (NASDAQ: META), Tesla Inc (NASDAQ: TSLA), and Amazon.com Inc (NASDAQ: AMZN).
As a tech-based index, the Nasdaq Composite has been extremely sensitive to changes in monetary policies that affect growth stocks. From inflation impact to the disruption in the supply of chips and the continuous interest rate hikes and antitrust regulations, the Nasdaq Composite has buckled under the weight of these events to stand as the worst-performing index in the US.
Today, the Nasdaq Composite is down by more than 27% year to date, showcasing how much of a beating the tech-heavy index has received thus far this year. Just like the Dow Jones Industrial Average, the Nasdaq Composite offers a good opportunity for investors to gain exposure high performing tech stocks with a somewhat positive degree of safety.
Investors can invest in funds that track the Nasdaq Composite but doing so should only be accompanied by the right guidance.
Historically, Nasdaq has outperformed its peers and it once recorded a massive 56.86% growth in 1991, coming up from a low of 17.81% the previous year. It is not uncommon to find intermittent periods of price slumps associated with the Nasdaq Composite, one impressive fact about its history is that there is hardly a persistent year-on-year fall.
The Nasdaq Composite May Take a Bearish Turn in 2023
Different forecasting platforms drawing insights from leading market experts are projecting what looks like a doomsday fiscal year for the Nasdaq Composite.
While such a bearish projection is not new, it may be justified as the index has defied the market outlook over the past three years which has been outrightly characterized by immense economic turmoil. Before this data is explored, here are analysts’ projections for the Nasdaq Composite in 2023.
- January 2023: 10201 down 11.16%
- February 2023: 10711 down 6.71%
- March 2023: 11030 down 3.94%
- April 2023: 10479 down 8.74%
- May 2023: 9984 down 13.05%
- June 2023: 10483 down 8.70%
- July 2023: 9959 down 13.26%
- August 2023: 9684 down 15.66%
- September 2023: 9200 down 19.87%
- October 2023: 9660 down 15.87%
- November 2023: 9177 down 20.07%
- December 2023: 8718 down 24.07%
The forecast above sees no positive month for the Nasdaq Composite and should this be used as a basis for betting on the index, it is a bad investment choice for 2023.
However, it is worth noting that this is just a forecast and trends change in ways one cannot imagine. The historical data of the Nasdaq Composite where it hit an annual growth of 35.23%, 43.64%, and 26.45% in 2019, 2022, and 2021 respectively shows that a reverse correction is imminent.
Our advice to those looking to bet on the Nasdaq Composite is to think long-term. The capitulation billed for 2023 may be mild, but investors may be better off if they plan ahead and manage their risks appropriately.