Market to slow, remain solid, experts say

Factors may change forecast

NEW YORK — Get ready for investments to be merely good again.

They’ve already been great for years, as both stocks and bonds have delivered fat returns since the worst of the financial crisis passed in 2009. But after such a strong and long gallop upward, markets have many reasons to slow down, analysts and fund managers say.

So instead of getting 10 percent or more from stocks, which index funds are on pace to deliver for the sixth time in eight years, a better expectation may be for something in the low to mid-single digits, many of the predictions say.

Few are expecting losses for stocks. But for bonds, which have been stellar for decades, even a flat year could be considered a victory.

Analyst forecasts have a long history of being wrong. Many market watchers were forecasting only modest gains for this year, for example. And even though big, unexpected events repeatedly shook markets, from the U.K. decision to quit the European Union to Donald Trump’s presidential election last month, stocks still managed to turn in a better-than-expected year.

Many things could trip up forecasts for 2017.

Here’s a look at what market watchers are thinking: senior portfolio manager at American Century Investments. “It’s going to be waitand-see for us.”

When the financial crisis was still burning in early 2009, the S&P 500 index was trading at the cheap level of eight times its earnings per share from the prior 12 months. Now, it’s trading at 19 times, according to FactSet.

At such levels, companies will need to produce bigger profits to warrant further gains in stock prices, analysts say.

Strategists along Wall Street, from Deutsche Bank to Goldman Sachs, are predicting the S&P 500 will climb to 2,300 or 2,350 in 2017. That’s less than 4 percent higher from where it was on Tuesday.