Market Drama
Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA
January 06th, 2025
Watch Time: 3 minutes
Welcome to this week’s Market Drama!
Stock Market Assessment
- S&P 500
- In 2024, the S&P 500 was up 25%.
- If you combine 2023 and 2024, the S&P 500 was up 57%.
- Should I sell or avoid buying stocks?
JP Morgan conducted a study comparing the return profile for the S&P 500 when investing at all-time highs versus any random day. Based on 30 years of data, the findings suggest that markets generate higher returns when you invest at a new high rather than on a random day. In other words, it’s not a bad idea to invest, even if we are near all-time highs.
- Will the third year also be strong?
Average market returns are rare. Wall Street’s average prediction is that the market will rise by 10% in 2025. However, when looking at the last 96 calendar years, there have only been two years where the market ended with gains between 10% and 12% (1971 and 1949).
The markets are usually either up significantly, or there’s a 26% chance of a negative year. Just because we had two strong years doesn’t mean 2025 will also deliver strong returns. It will depend on the market’s fundamental drivers (see below).
Main Fundamental Drivers of the Market
- Will earnings continue to grow?
- Will the economy avoid a recession?
- Will the Federal Reserve continue to lower interest rates, supporting valuations?
Next Week:
- December payroll data will provide insight into the job market.
- PMI and ISM data will offer an overall snapshot of the economy’s performance.
Stay tuned for next week.
– Andres
Disclosure: This material provided by Zoe Financial is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Nothing in these materials is intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Zoe Financial is not an accounting firm- clients and prospective clients should consult with their tax professional regarding their specific tax situation. Opinions expressed by Zoe Financial are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Zoe Financial, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.