The 2025 Wall Street S&P 500 forecasts are rolling in, and so far, the outlook is all bullish. I haven't found a single bearish forecast, which is somewhat worrisome. Most firms project the S&P 500 will close 2025 around 6,500—a solid 8.3% gain from the 6,000 level. If 2024 ends as expected, with the index up over 25%, it will have been a stellar two years for the market.
Being a Wall Street strategist might just be one of the best jobs around. The stakes for being wrong are virtually nonexistent. The process is straightforward: estimate S&P 500 earnings, apply a multiple, and voilà—a target price. Agree with the projected figure? Craft a narrative to back it up.
Of course, strategists also hedge their bets by offering scenarios in which their forecasts might not pan out. This is a fair practice, considering the inherent uncertainties of investing in risk assets like stocks. There’s always the potential for unexpected events to derail even the most well-thought-out predictions.
Let's dive into the 2025 S&P 500 targets released so far and share the insights from the major Wall Street firms. I’ll also share my own 2025 forecast that will guide my investments. As more forecasts come in I'll update this post.
2025 Wall Street S&P 500 Forecasts
For context, at the end of 2023, the average Wall Street forecast predicted the S&P 500 would reach 4,861 by the end of 2024. As the index continued to climb, most strategists revised their target prices higher. At that time, I had a base case target price of 4,900, with an upside scenario of 5,250 for 2024. I was more bullish than Wall Street, but it turns out, not bullish enough.
As you'll see below, every investment firm is now echoing a similar outlook for 2025. When such consensus forms, it’s a red flag for caution—we should prepare for the possibility that things may not unfold as anticipated.
Morgan Stanley 2025 S&P 500 Target Price 6,500
Morgan Stanley’s chief U.S. equity strategist, Mike Wilson, exemplifies why market forecasts should be taken with a grain of salt. After accurately predicting a bearish 2022, Wilson maintained his negative outlook through 2023 and 2024, forecasting a ~24% drop in the S&P 500 to ~3,200. Instead, the index surged 24% to close at 4,736 in 2023 and is up 25%+ in 2024, far exceeding his 4,500 target.
In early November 2024, Wilson projected a mid-2025 S&P 500 target of 5,400, 8.5% downside compared to the then 5,900 level. However, he has since relented his bearish stance and introduced a year-end 2025 target to 6,500, partially influenced by President-elect Donald Trump’s victory.
Wilson cites Federal Reserve rate cuts, stronger economic growth, and the potential for deregulation under Trump’s administration as reasons for a more optimistic outlook.
“A rise in corporate animal spirits post-election, as seen in 2016, could drive a more balanced earnings profile in 2025,” Wilson said.
While he acknowledges valuations remain elevated, he believes they’re justifiable if the economy holds steady. Median stock multiples, at 19.0x, are less stretched and should remain supported by broader earnings recovery in 2025.
Wilson advises focusing on high-quality cyclical stocks, especially in financials, while underweighting consumer discretionary and staples due to weak pricing power and tariff risks.
Despite his bullish shift, Wilson urges caution. “Investors should stay nimble amid changing market leadership and uncertainty around Trump’s policies on immigration, trade, and government spending,” he said, noting the potential for a significant policy-driven market shift.
Goldman Sachs 2025 S&P 500 Target Price 6,500
Goldman Sachs projects the S&P 500 will reach 6,500 by the end of 2025, delivering a 8% price gain and a 9.3% total return with dividends. Earnings per share (EPS) are forecasted to grow 11% in 2025 and 7% in 2026, with revenue growth aligned to 5% nominal GDP growth driven by 2.5% real GDP and cooling inflation at 2.4%.
President-elect Donald Trump’s trade policies, including targeted tariffs and tax cuts, are expected to offset each other’s impact on EPS, keeping Goldman’s forecasts in line with consensus at $268 for 2025 and $288 for 2026. That's a P/E multiple of 24X for 2025 and 22.5X for 2025. Extremely expensive compared to 17X in 2022.
Goldman sees mid-cap stocks as a potential opportunity, noting the S&P 400’s history of outperformance, competitive earnings growth, and lower valuation at 16x P/E.
Risks for 2025 include high valuations amplifying the impact of negative shocks, potential broad tariffs, and rising bond yields. On the upside, more dovish Federal Reserve policies or favorable fiscal changes could boost returns.
“Investors should leverage periods of low volatility to capture upside or hedge downside using options,” David Kostin, chief US strategist advises.
Goldman Is Hedged By Having Conflicting Forecasts
What’s interesting is that Goldman’s U.S. strategist isn’t fully aligned with his own forecast for low long-term equity returns. He projects the S&P 500 to return just 3% annually over the next decade—a stark drop from the 13% average annual returns of the past 10 years and the historical 11% since 1930.
It’s possible we could see another strong year in stocks in 2025, followed by weaker performance in subsequent years. Kostin’s low 10-year return forecast stems from high valuations and concentration risk in the “Magnificent 7” companies dominating the index.
From a career protection standpoint, Kostin seems hedged. If the S&P 500 struggles in 2025, he can point to his conservative 10-year outlook. If it performs well, he can highlight his more bullish short-term forecast. In other words Kostin can speak out of both sides of his mouth and claim he is “right,” regardless of what happens. Smart!
Barclays 2025 S&P 500 Target Price 6,600
Head of U.S. equity strategy Venu Krishna predicts the S&P 500 will rise another 10% to 6,600 in 2025, driven by strong tech earnings growth and a resilient economy. While this forecast marks a slowdown from the index's ~26% YTD gain in 2024, the analysts remain optimistic that favorable economic conditions will continue supporting the stock market.
“Macro slowing to still-healthy levels should support further US equity upside next year, though at a more moderate pace than '23-'24. Constructive positioning and policy uncertainty provide opportunities for stock and sector selection,” they noted in a report.
The bullish outlook rests heavily on the robust U.S. economy. Consumer spending, deemed the “central pillar” of the economy, remains strong, bolstered by rising incomes and steady financial health. “The virtuous cycle between income growth and consumption remains intact,” Krishna wrote, adding that concerns over household financial distress are overblown given low delinquency rates and lighter consumer debt burdens compared to pre-pandemic levels.
The Risk To Their Forecast
Big Tech is also expected to drive market gains, with the strategist projecting Wall Street is underestimating earnings growth for the sector by 12%. However, they caution that hefty AI investments and investor impatience for returns could pose risks.
Inflation remains another concern, particularly if President-elect Donald Trump implements policies like sweeping tariffs and immigration crackdowns, which could drive up prices through 2026. Such scenarios may limit the Federal Reserve's ability to cut rates as much as markets expect, creating potential headwinds for equities.
Additionally, rising Treasury yields—already near levels that have historically pressured stocks—could become problematic if fiscal expansion materializes alongside fewer rate cuts.
BMO 2025 S&P 500 Target Price 6,700
BMO’s chief investment strategist, Brian Belski, forecasts the S&P 500 will reach 6,700 by the end of 2025. Here are his three key reasons:
- The bull market’s momentum
The stock market is entering its third year of a cyclical bull rally. Historically, such rallies yield an average annual gain of 6%, but this cycle has far outperformed, with returns of 24% in 2023 and approximately 26% year-to-date in 2024. - Stronger-than-expected earnings growth
Despite concerns over high valuations, Belski argues that earnings growth is understated and expects a broadening of market performance beyond the dominant few tech stocks, which currently account for about a third of the S&P 500’s value. “The broadening-out effect is real,” he said, noting that the other 490 S&P stocks are showing faster earnings growth. - Supportive monetary policy
Markets will continue to benefit from easing monetary policy. The Federal Reserve has already cut interest rates twice since September, with a potential quarter-point cut in December. Goldman Sachs projects rates could fall over 100 basis points to 3.25%-3.5% in 2025, though some uncertainty remains under President-elect Donald Trump's policies. Belski emphasizes that looser monetary policy and fiscal support will drive market gains, solidifying his bullish outlook for the S&P 500.
Deutsche Bank 2025 S&P 500 Target Price 7,000 (Was The Most Bullish)
Deutsche Bank’s chief global strategist, Binky Chadha, predicts the S&P 500 will hit 7,000 by the end of 2025, a 16.7% gain from 6,000.
“We expect strong equity and bond inflows driven by robust risk appetite,” Chadha wrote, adding that annual S&P 500 buybacks could rise from $1.1 trillion to $1.3 trillion in 2025, aligning with earnings growth. “Even under conservative assumptions, the demand-supply backdrop for U.S. equities remains solid, pushing the S&P 500 toward 7,000.”
Looking ahead, Deutsche Bank anticipates stronger U.S. growth in 2025, bolstered by potential tax cuts and deregulation under the Trump administration. However, the firm warned that protectionist trade and immigration policies could derail its bullish outlook.
“The biggest risks lie in aggressive trade and immigration policies, which could hurt growth and drive up inflation,” Deutsche Bank cautioned. “This might force the Fed to halt rate cuts or even consider raising rates, pressuring bond yields and equities.”
Oppenheimer 2025 S&P 500 Target Price 7,100 (Latest Most Bullish)
A 7,100 target price implies an upside of 18% above 6,000 and a 25.8x multiple over their earnings forecast of $275, John Stoltzfus, chief investment strategist at Oppenheimer, said in a note. He expects earnings to grow by 10% in 2024 to $250, slower than Goldman's 11 EPS forecast growth.
Oppenheimer cited “the quality of economic, business, consumer and job growth data from the start of the Fed’s rate hike cycle in March 2022 through the initial cuts to its benchmark interest rate in September and November (and likely again this month of December)” as factors influencing this price target, “[suggesting] further underlying support for the economy to sustain the current bull market.”
Stoltzfus also said that artificial intelligence presents “a watershed point” in the history of technology and economic progress that may offer the same growth opportunities that automobiles contributed to the economy in the 1920s, changing “the way, where, and how people lived.”
Financial Samurai: 2025 S&P 500 Target Price 6,240 (least bullish)
After reviewing the 2025 Wall Street S&P 500 forecasts, it’s hard not to feel bullish about equities. If the median projection of an ~8% gain from 6,000 holds true, my equity portfolio should cover my family’s living expenses without any need for active income in 2025. Take your public equity exposure and multiply it by 8% to see how much you could potentially make as well.
That said, I remain cautious about the market reaching or exceeding 6,500 by year-end. Such a result would mark an extraordinary three-year run of +24%, +26%, and +8% gains. Sustained returns like these could theoretically shave a decade off the traditional retirement age, creating immense financial freedom for millions of Americans.
But life isn’t that easy. If it were, everyone would save and invest aggressively for 20 years, then relax and enjoy the good life with flat abdomens. Instead, many of us make life harder by chasing material possessions and struggling to delay gratification.
Valuation Isn’t Attractive Enough To Be Bullish
I believe there’s a 65% chance that a 1–30-year Treasury bond yield will outperform the S&P 500 in 2025, starting from January 1.
My target for the S&P 500 is 6,240, representing a modest 4% upside from 6,000. 6,240 equals 21.7 times 2026 earnings of $288. At 20 times forward earnings, the S&P 500 would trade at 5,760, for 4% downside. A decline in the index is easily possible given the historical S&P 500 P/E multiple is closer to 17-18X (4,896 – 5,184). If earnings grow slower than the 11% estimate in 2025 and 7% estimate in 2026, then the index is further at risk of decline.
I feel much the same as I did at the end of 2021—cautious and incredulous about the year’s S&P 500 gains. However, back then, like now, I didn’t have the conviction to predict a down year for 2022. I'm also not bearish enough to change my existing asset allocation to a more defensive position. My public equity exposure is still about 4% lighter as a percentage of my net worth than my 25% target due to my house purchase.
For more color on my cautious outlook, I left work in 2012 with a net worth of around $3 million, believing it was enough to sustain our lifestyle. Any gains since then feel like gravy. However, with two young children, living in expensive San Francisco, and neither my wife nor I having traditional day jobs, we need to remain relatively conservative with our investments and outlook. The last thing we want is to be forced back into the workforce due to a downturn.
Prefer Commercial Real Estate Over Stocks In 2025
After an incredible two-year rally in the S&P 500, I’m shifting my focus to commercial real estate in 2025. With the Federal Reserve firmly in a multi-year rate-cutting cycle, I see an attractive opportunity in real estate, especially given the likely policy direction under President Trump.
As a seasoned negotiator, Trump’s strong rhetoric on tariffs feels more like a strategic anchor than a firm commitment. His background as a real estate developer and vocal support for lower mortgage rates suggests he’ll prioritize policies that make housing more affordable. Coupled with his criticism of the Biden/Harris administration’s excessive spending, I expect him to propose measures aimed at curbing inflation, which could further drive down interest rates across the board.
With my expectation that the S&P 500 will see a modest 4% gain, the bar for outperforming equities through commercial real estate is relatively low. Pent-up demand has been building since the Fed began hiking rates in 2022, and builders significantly slowed new home construction in 2022, 2023, and 2024. This supply constraint points to an undersupplied housing market by 2026–2028.
I want to strategically acquire residential real estate complexes to capitalize on the eventual upward pressure on rents and property prices. As rent increases, so does net operating income, which directly boosts property values.
What Happens To The S&P 500 In Its Third Year After Back-To-Back 20% Gains?
The last time we saw back-to-back 20%+ gains in the S&P 500 was in 1995 and 1996. This momentum carried into 1997, which turned out to be a banner year with the S&P 500 closing up 31%. Despite the Asian Financial Crisis, the index continued its strong performance, closing up 28.58% in 1998 and 21% in 1999. It wasn’t until 2000 that the S&P 500 dropped 9.1% as internet and tech stocks collapsed.
With the Fed likely cutting rates in 2025 and perhaps into 2026, the setup is reminiscent of 1998, when the Fed began cutting rates in response to the Asian Financial Crisis and the Russian debt default in August that year. Based on historical patterns, 2025 could very well be another strong year for equities. I hope so!
Keep On Investing No Matter What
With valuations stretched and the potential for increased geopolitical tensions, the S&P 500 could easily correct by 10% or more in 2025. If that happens, I’ll be buying the dip, as I’ve consistently done since leaving work in 2012. Buying sell-offs is easier for me now because I'm investing for my children, who have 20+-year investment time horizons.
If I’m wrong and the S&P 500 delivers much more than a 4% gain, fantastic! I’ll hit my financial independence target date two years ahead of schedule. If the S&P 500 corrects, I’ll buy more stocks for my children.
While I’m not excited about public equities, I’m optimistic about real estate and private AI companies. I believe these two asset classes have greater ability to surprise on the upside. Will public equities finally take a backseat to other asset classes? We'll find out a year from now!
Readers, what’s your 2025 S&P 500 forecast? Are any of you expecting a bearish scenario where the market drops by 10% or more? Let’s hear your thoughts! Other 2025 S&P 500 targets include: UBS: 7,000, RBC: 6,600, and Evercore ISI: 6,600 by June 2025.
Diversify Into Residential Private Real Estate & Venture
If you’re looking to diversify into real estate without taking on a mortgage or managing physical property, consider Fundrise. Fundrise is a private real estate investment platform that allows you to invest 100% passively in residential and industrial real estate. With over $3.2 billion in assets under management, Fundrise focuses on properties in the Sunbelt region, where valuations are typically lower, and yields tend to be higher.
I’ve currently got over $300,000 with Fundrise, split between real estate (45%) and venture capital (55%). I'm building up my venture capital position now to take advantage of what I think will be a robust IPO market in 2025 and beyond. After ServiceTitan's (TTAN) successful IPO, I expect other Fundrise venture portfolio companies to do well in the future as well. I also expect real estate prices to start picking up as rates go lower.
As always, do your due diligence, diversify, and only invest money you can afford to lose. There are no guarantees with any risk assets. Corrections and bear markets are inevitable. Your investment choices are yours alone. The key is maintaining a proper asset allocation and investing consistently for the long term.
Fundrise is a long-time sponsor of Financial Samurai and I'm and investor.
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This related article may be late to the game but answers a lot of readers’ question about Wall St Firms (in)accuracy with their yearly S&P predictions. It appears Bank of Montreal followed by Oppenheimer are the least inaccurate with Morgan Stanley and Wells Fargo in the kaboose.
https://www.bloomberg.com/news/newsletters/2024-12-22/market-forecasts-for-the-year-ahead-are-usually-too-pessimistic?cmpid=BBD122224_SUNNL&utm_medium=email&utm_source=newsletter&utm_term=241222&utm_campaign=sundaynl
You said “Personally, I’ve always considered stocks to be a bit like “funny money” due to their lack of intrinsic value.” Odd that you say that Sam.
For me personally, I’ve always considered U.S. currency to be a bit like funny money, due to its lack of intrinsic value. The key is that we take the word of our government that they, and all of us, believe that we will be made whole. That is, the money is convertible to ‘stuff’. The government does claim to own lots of land, that is, ‘stuff’. And buildings. So there is some intrinsic value for that.
Just like U.S. companies own lots of buildings, land, railroads, patents, oil/gold/coal/lithium & bitcoin?? deposits…to which we stockholders attach a present, and many times future, value, reflected in the price of shares. That sounds like a lot of intrinsic value to me. But that’s just me.
Unless I sell stocks or spending the dividends, I cannot shelter my children with stocks, jump in stocks to take me to the airport, eat stocks when I’m hungry. This is what I mean by stocks, being funny money and having no utility.
But stocks do represent the value of the businesses and the production they produce.
My hope is that more people invest in stocks with a purpose that goes beyond just making more money on a digital screen. Be intentional with saving and investing as well as selling. Big is the only way you can enjoy stocks is to sell or spend the dividends.
But U.S. currency works the same way. You cannot shelter children with currency either, though you can convert currency to stuff nearly immediately. But with stock, it takes 5-7 business days, then sure enough, there’s the U.S. currency. So no difference between stocks & currency except 5-7 days.
One difference – stocks have risen inexorably it seems since 1913. The value of the U.S. dollar, unfortunately, has plummeted, off a cliff, since 1913. What is there about that date that rings a bell? Seems that stocks might have more intrinsic value than U.S. currency.
True, which is why currency is also considered funny money to me. I prefer owning real assets that can be enjoyed, like a house.
Hi Sam,
When you refer to ‘venture capital‘ at Fundrise are you specifically referring to their Innovation Fund?
Yes. One of their holdings, ServiceTitan IPOed recently and has done well. While another of its core holding, Databricks just raised another $10 billion in funding at a higher valuation.
The market is as always unpredictable. But valuations are high by any standard and a more substantial reversion towards the means is overdue. What is the catalyst? This is where we get into the Donald Rumsfeld list; I’ll stick with the known unknowns on my list for 2025.
The tide washes out on AI. It takes time to develop models and build use cases, and it also takes massive capital investment up front. While I believe that there is productivity value in AI, we are no doubt in the hype zone and set up for the trough of disillusionment. But when?
Inflation makes a return. Supply shortages, climate issues, wage growth, debt overhangs, deglobalization, tariffs, there seems to be a lot of arrows pointing towards higher inflation. While I don’t think a return to 7% is the cards for 2025 (possible longer term), a change in tone by the Fed is absolutely possible and could lead (let’s say by summer) to a repricing of rate cuts.
War escalates. A tail risk, but there are plenty of flash points out there. Does one of the bad actors make a move?
Probably we will just solider forward towards another incremental gain. But I think the probabilities are such that caution is warranted.
Sam, thank you for the transparency with your passive income streams and investments, it really is a great reference. Since I am still working full time, I am building a real estate portfolio for passive income through private real estate platforms such as Fundrise. I would like to ensure I diversify in that respect as well so as not to depend on any one platform completely, so I am wondering if you are also significantly invested in the other two main platforms you mentioned such as RealtyMogul and Crowdstreet? I have read many of your other posts discussing the various other private real estate platforms.
Nobody knows. That’s why Sam has some fun at these analysts’ expense. I do think nothing is impossible in the markets and the 1995-2000 run is evidence of how it can just keep going going up. Buybacks, lighter regulatory frameworks, maybe lower interest rates (wildcard), M&A activity, IPOs all point to hot markets. This is not a time to take your foot off he gas. Drive steadily, carefully, and enjoy the ride.
Indeed. With the way things are going, my 2025 target price might be achieved by the end of 2024!
Half the battle is just getting the direction right.
My gut tells me down. Inflation, US debt more in focus, world political situations – all just feels like something could light a fuse that could make this drop 10% quickly.
That being said, I am long and I just make sure I always have hedges on to limit my downside and always have fixed income/credit related equity investments in floating and fixed rates.
One thing that would be good is if multiple falls, more companies could be exposed to a takeover bids which could help so PE funds as well as provide more product in the credit world (where spreads have fallen quite handsomely and are almost too low for the risk)
Hi,
Here is my situation…I am about to realize approx. $850,000 from a private equity buyout. I have $250,000 in cash. I am new to the investment game. I need to make up some retirement savings. I am 58 and my wife is 50. I am very conservative….I grinch at what I would have made in the S&P this year if I had all my money in it. Right now most of my cash is in a savings account earning 5.75%….it’s safe….ha ha….I need to be more aggressive but it looks like the party is over for the S&P and I assume Nasdaq as well….maybe I split the money in both markets anyway….I am also considering rental property….yea it has it’s headaches but is safe….you won’t make much but you low chance of loosing your initial investment…
I am open to opinions or better ideas of maybe what else to consider doing with my cash.
What was the IRR of your private equity buyout? $850,0000 is not chump change.
I like sitting on any windfall for 1-3 months before deploying it. Especially with rates over 4%.
I was given a piece of the business when the original owner sold it to private equity. I actually was thinking the same thing. The first thing I should do is nothing.
so I’m in this situation where I’m fortunate enough to have some money to play with, but obviously like everyone else I really really want to make the most of it so I guess I’ll see how the market goes the next few months and then decide what to do.
FYI we do not have any debt, no cars no mortgage everything is paid for. so there are no high interest loans that need to be paid off first.
Where are you currently getting the 5.75% savings rate?
It’s a bank in ohio called US Savings Bank
I’ve had mortgages with them for 25 years.
Having a mortgage with them is not a requirement.
Nice summary. I forget, have you made predictions in prior years, and if so how accurate were they? You mention Morgan Stanley’s erroneous prediction for 2023; what about the others? It would be fun to see whether historical predictions were more accurate than chance.
Yep, every year. It’s in the post for 2024 prediction.
What’s your prediction for 2025?
Well, as my name suggests I claim no clairvoyance. That said, tariffs and mass deportations are clearly inflationary, and tax cuts are likely to be. I’ll be pleasantly surprised if the S&P is flat next year.
But because my crystal ball is cloudy I plan to dollar-cost average into the market on a monthly basis and take advantage of tax-loss harvesting if opportunities present themselves.
It is interesting to think about what a protracted timeframe, like 10 years, of annual returns in stocks ranging from -10 to +10+ would potentially impact so many things. Just a lazy generally flat market year after year. We have never really had that. Every major correction followed by years of huge gains. Would it shift out age of retirement if all our investment accounts were basically the same in 10 years as they are now? Almost every retirement plan assumes at least a 5% annual return over time. What if the next 10 years it was 0 on average? Would it drastically diminish inflows to stock ETFs as people would hunt “winners” more? Would bonds rise and be a great place to be in that scenario?
Realize, while it seems not that big a deal, that in the history of the stock market, there has never been a 10 year span where the stock market did not return at least 5% on average annually. That is pretty amazing considering we have a depression, a tech crash, and a major economic recession in there.
I’m sure this bull run still has more room to grow, but I decided to lock in some profits. I sold all of my individual positions and reinvested the proceeds into a mix of CDs and t-bonds.
Paying taxes on the gains won’t be fun, but oddly enough, I feel more at ease and confident that it was the right move. Now I’ll have a lot of time to think about my next move…
Fundrise seems tempting.
Currently sitting at 6,045 and rising, so already up .08 from 6,000 and still 29 days until ‘‘25.
I predict the stock market will be higher if good things happen and lower if bad things happen. I can’t tell you what the good things or bad things are. At the end of the year I promise I’ll be correct.
Sincerely,
Market Strategist
Lol, nicely done.
The ironic part is – even what you have laid out is not necessarily true (especially on a one year basis). Markets advance on bad news and retreat on good news all the time. It is like 4D chess because what actually matters is what most investors expectations are and what is already baked into prices (most things are already baked in because the market is forward looking). Also, sometimes investors dramatically shift in what multiple they are willing to pay for stocks. Sometimes it’s 30x, sometimes it’s 10x. It’s best to just buy stocks when they are cheap or at least fairly priced and then what will happen will happen.
Is it possible that cyclical dynamics have permanently changed since the introduction of smart phones and social media? For example, we have been in a bull market since the Great Recession, minus what happened briefly during a global pandemic. As the great recession drew to a close, the mainstream use of smart phones and social media fell upon us. Since that time, stocks have done nothing but roar, outside of a brief pandemic induced drop that was followed by a speedy V shaped recovery. This is despite out of control inflation, etc. Also, unlike the dot com bubble where everything was based on speculation, AI is being driven by the world’s largest companies that are already profitable and flush with cash. Is it possible that simply through exposure to the market, as well as the adoption of index investing, buy and hold strategies, and dollar cost averaging learned by so many since the surge in information, we are in a new age where down cycles are far fewer and far between due simply to millions of additional investors adopting these tried and true strategies (FOMO). Somebody prove this thesis wrong.
And if that is true. That’s when to sell
Two things occurring simultaneously, absent any specific evidence showing cause and effect, is correlation not causation.
True. However, prove it’s not causation by identifying how many 12 year bull runs the market has had. Then, mix in this new variable for the current one. Simply saying it could be correlational and not causation doesn’t prove the thesis to be invalid. I’m actually surprised nobody seems to talk about this timeline syncing up perfectly to create an ongoing non-cyclical bull run dynamic.
Sam, thoughts?
Dec 2021 to Oct 23 give or take a month on each end was a bear market.
12/21 was an unprecedented modern global pandemic. Pullback had nothing to do with anything else and was followed by a V shaped recovery despite hyper inflation.
I would agree there has been no interruption to a bull market over the last 15 years. 2020 and 2022 were not a “bear market” they were a shallow and VERY brief correction followed immediately by a laser beam straight upward. Over the last 5 years (which starts Dec 2019 and includes both the 2020 and 2022 small rapid corrections) the SPY has nearly doubled without even factoring in dividends.
Oh wow, I’m shocked all the brokerage houses are bullish and way more bullish across the board than I would have expected. Hey, I’ll take it. I would love to have another strong year in the markets. But I’m also skeptical. I’ll probably keep my stock allocation on the more elevated side for the first six months of the year, but plan to start pulling back for the second half. I just don’t want to get blindsided by some unanticipated event or spiraling chain of corporate earnings misses and watch my balance get pummeled.
And good point on Kostin’s “hedge” with his 10-year vs 1-year forecasts. I was just wondering about that when I started reading that section. It will be fun to watch how his annual forecasts change over the next decade if he stays at GS.
Thanks for putting this together. It’s one of my favorite posts I look forward to this time of year. Here’s hoping for a strong Santa Claus rally and a prosperous year of investing in 2025!