The S&P 500 has hit multiple all-time highs in 2024 but the “time may have passed for investors to make the ‘easy money’,” according to Morgan Stanley recently.
One must ask: what easy money? Did Morgan Stanley say a year ago, make some easy money and bag 25 per cent returns? Well, no. In March, it suggested the S&P 500 would likely fall 20 per cent. “Morgan Stanley says US rally isn’t start of bull market,” headlined Bloomberg in May.
On November 1st, when stocks were about to soar following a corrective period, it said investors had “finally awoke” to painful realities.
On November 6th, Bloomberg reported that the “best week in a year was just a bear market rally, Morgan Stanley’s Wilson warns”.
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Easy money implies it was obvious markets would soar. In reality, most economists (85 per cent, according to a December 2022 Financial Times poll) expected the US to fall into recession. The consensus strategist forecast was for stocks to gain just 6 per cent, not 25 per cent, in 2023.
We’re always warned the days of easy money are over. Indeed, during the long bull market between 2009 and 2020, the phrase appeared in newspaper headlines every single year. In reality, there’s no such thing as easy money – it only seems that way after, not before, market gains.
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