David Lin: Roaring 20’s Is Back: S&P to 8,000 Says Economist Who Called Rally

While bear markets tend to last for 18 months on average, bull markets tend to last for years. Both 2020 and 2022 saw bear markets. It’s unusual to have two big market declines so close together.

But it could also mean that stocks are on track for further gains through the rest of the decade. That means that investors should use small 10% pullbacks as a buying opportunity in the years ahead.

As with the bull market of the 1920s and 1990s, technology will lead the way. Instead of radio or the internet, AI is still in its early stages, and companies haven’t even started to see the financial benefits yet. That suggests that the next few years could see the S&P 500 hit 8,000.

From today’s prices near 5,500, that’s another 45% rally over the next few years. Given how markets return 10% annually on average, that’s not a huge prediction.

But it’s also a sign that the trend in AI stocks remains sustainable. AI-related companies, particularly big-tech ones, have far outpaced the market.

In order for stocks to safely make new highs, other sectors will need to join in the market rally in the years ahead.

Given AI’s potential to revolutionize and improve productivity and profits across nearly every sector, such a move is possible.

To listen to the full interview on how the S&P 500 will rally to 8,000, click here.