A 20% S & P 500 ‘Three-Peat’ is unlikely in 2025, Market Strategist Says

Stock Market Investors Enjoyed Lofty Annual Returns over the past two years. However, 2025 may not offer a “Three-faceat,” Investment Analysts Say.

The S & P 500 Stock Market Index yielded A 23% Return for Investors in 2024 and 24% in 2023. That Returns 25% and 26%, Respatively, With dividends,

Three Consecurative Years of Total Returns of more than 20% for us stocks is a history. It has only Happy Once – In the Late 1990s – Dating Back to 1928, According to Scott Wren, Senior Global Market Strategist at the Wells Fargo Investment Instetute.

“Do Expect an S & P 500 Index Three-Peat in 2025? In short, no,” Wren Wrote in a Market Commentary Wedns.

The US stock market has delivered average annual returns of roughly 10% Since 1926, according To dimensional, an asset manager. After Accounting for Inflation, Stocks Have Consistent Returned an average 6.5% to 7% per year dating to about 1800, according to a mckinsey analysis,

“We have been spoiled as investors” the past two years, said cally cox, Chief Market Strategist at Ritholtz Wealth Management.

“Twenty-Peer Gains Haven’t Been The Norm,” Cox Said. “Twenty Percent Gains are the Exception.”

Who History “Isn’T Gospel,” There are reasons to think the stock market may not perform as well in 2025, Cox Said.

For one, there are many uncertaintes that could negatively affect the stock market, Including tarifs and a Potential rebound in inflationWren said. A Surge in bond yields Might also Pose a Headwind, Wren Wrote in a Market Commentary. Higher Yields Could Dampen Demand for Us Stocks.

More from Personal Finance:
30% of Americans increasing their emergency savings in 2024
These red flags can trigger an irres tax audit
Us appeals court blocks biden save plan for student loans

Additional, Technology Companies Have been a Major Driver of S & P 500 Returns In recent years but may not be poised for the same outperformance this year, cox said.

Tech stocks Suffered a rout in late JanuaryFor example, amid fears of a chinese artificial intelligence Startup Called Deepsek Undercutting Major Us Players. Theose stocks have revgly recovered Since then, however.

In all, a rosy backdrop of solid economy growth and consumer space, coupled with relatively low unimplude, may push the s & p 500 up about 12% in 2025, wren wrong. That would be slightly better than the long-term Historical Average, He Said.

“So do not be disappointed,” Wren Wrote. “We think investors should be optimistic.”

However, investors should not let high expectations cloud Judgment about Market Risks, Cox Said.

The current environment is one in which investors should “Prioritize portfolio balance” and long-term investors should ensure their portfolio is in line with their targets, She Said.