When 2015 ended, everyone said that the Dow (DIA) and S&P 500 (SPY) had seen their worst yearly finishes since 2008. Nobody, however, thought that 2016 would cook up an even more dismal beginning, with the blue-chip index tumbling over 1000 points in the first week – which represents the worst first five days of any year.

During the week, China halted trading twice, after the circuit breaker mechanism came into effect. Growth concerns in China that were at the root of the global market rout in 2015 are touted to have caused the early 2016 upheaval too.

In such a backdrop, it is not wrong for US markets to look for domestic benefits. The pace of the Fed rate hike is crucial this year. A gradual rate hike should attract more cash into the US markets. The labor market is showing strength, and the retail sector’s improving trends speak volumes on consumer confidence.

While we cannot run down the chances of the market moving sideways and seeing high volatility, many analysts are not too bearish about 2016. In fact, many Wall Street analysts are of the view that 2016 is not the year of the bear market. They are trimming down the severity of financial turmoil, and some even predict the S&P 500 scoring as high as over 2300.

If investors are eager to lap up opportunities, a prudent move would be to buy the beaten-down stocks with encouraging fundamentals. The stocks, which we shall cherry-pick currently come at a bargain price after declining at least 10% in 2015, but have the potential to turn around in 2016.

Where Is the S&P 500 Headed?

Reportedly, Wall Street stock strategists do not expect 2016 to see a bear market, or stocks dropping 20%. But, there are concerns that markets may trade sideways, providing breakeven returns.

The optimistic calls see the S&P 500 soaring as high as 2360. That would be a significant jump from Friday’s close of 1922. Strategists believe that the gradual rate hike will not have any detrimental effect. Some also say that the concerns about credit markets are overblown, with no possibility of a recession. UBS Group AG’s (UBS – Analyst Report) year-end price target for the S&P 500 is 2,275. And the S&P 500 will have to drop to 1,750 to end the Bull Run – something that UBS finds “quite improbable”.

Meanwhile, the chief investment strategist at BMO Capital Markets sounds somewhat skeptical and believes that S&P may see a “cycle high” and endure a “corrective phase.” Nonetheless, even in this case, the S&P 500 is pegged to grow to 2100, in spite of warnings of a “bumpy” year.