INVESTING: WHERE TO INVEST NOW

Use our roadmap to prosper in a directionless market.

- ANNE KATES SMITH

When investors think about the stock market, they tend to characterize it in one of two ways: It's either a bull market or a bear market, with a clear direction, up or down. But there's a third option, and we've been living it the past year. Call it a trading range or sideways market. If you had to pick an animal correlate, maybe it would be a crab. 

For the past year, the S&P 500 index has fluctuated between roughly 3500 and 4300. But with a few exceptions, the broad-market barometer has stayed within 5% of the 4000 level, notes Bob Doll, the chief investment officer at Crossmark Global Investments. That shows a fairly even match in the tug-of-war between the bulls and the bears, he says, and fits with one of his top predictions for 2023: "This will be a year when neither the bulls nor the bears will be satisfied as volatility continues in both directions."

The stock market will, of course, break out of its range eventually, and it could do so before the end of the year. But in which direction? Wall Street is very much divided on this question, with strategists' price targets ranging from as high as 4600 to one strategist’s worst-case scenario of 3500. A number of forecasts cluster around 4300 at the high end (up 3% from the S&P 500’s level of 4169 on April 30, the date for prices and other data in this story) and roughly 3900 toward the low end (down 6%). Or consider a recent note from Goldman Sachs, in which the three-month, six-month and year-end S&P projections were all 4000.