2025 Stock Market Predictions, #235
Happy New Year! As we step into 2025, it’s time to reflect on the lessons of the past year and anticipate what’s ahead. In this episode, I take a deep dive into my 2024 market predictions—where I was right, where I went wrong, and the key takeaways to help guide your investment decisions moving forward.
The S&P 500 delivered a remarkable 23.8% return, Bitcoin soared by 121%, and interest rates shifted more than expected. How did these compare to my forecasts? I’ll share the details and insights that shaped last year’s performance. Then, we’ll turn our focus to 2025, where I outline predictions for major asset classes, the S&P 500, interest rates, and the ongoing battle between Gold and Bitcoin.
You will want to hear this episode if you are interested in...
[0:45] Happy New Year!
[2:21] Prediction #1: The S&P 500 will have positive returns
[4:58] Prediction #2: Growth stocks will lead the market
[7:35] Prediction #3: Small caps would outperform large caps
[9:35] Prediction #4: Gold would outperform bitcoin
[11:42] Prediction #5: Domestic stocks would outperform international stocks
[14:04] Prediction #6: We’d see two rate cuts and interest rates of 4.75%
[16:28] My 2025 stock market predictions
How did my 2024 market predictions fare?
Prediction #1: My prediction was that the S&P 500 would realize an 11% return, which turned out to be bearish. The S&P 500 returned 23.8% and closed out at $5,881. In 2023, the S&P returned a little under 25%. However, I did predict a positive return.
Prediction #2: My prediction was that growth stocks would continue to outperform value stocks. I was right. Since 1927, value stocks have outperformed growth stocks by an average margin of 4%. However, in recent years, growth stocks have been on a tear. They’ve outperformed value stocks in nine of the last 13 years.
Prediction #3: My prediction was that small cap stocks would outperform large caps in 2024. Large cap stocks have outperformed small cap stocks the last four years—including 2024. Small caps earned 16.9% and the S&P 500 earned 25%. I got this one wrong.
Prediction #4: I predicted that Bitcoin would outperform Gold. People think of Gold as a good hedge against inflation (which isn’t always the case). Bitcoin was up 121% in 2024. Gold only made 26%. Bitcoin outperformed gold by a significant margin.
Prediction #5: My prediction was that domestic stocks would outperform international stocks. Over the past 14 years, SPLG (US) has outperformed SPDW (International) in 11 of 14 years. In the same timeframe, SPLG has returned 205%. SPDW has only returned 82%. In 2024, the large cap S&P 500 returned 25% and SPDW returned only 4%.
Prediction #6: The Federal Funds Rate is the rate that the Federal Reserve sets for banks to borrow money from. They do this to set interest rates. The target was between 5.25–5.5%. It ended the year at 4.25–4.5%. My prediction was 4.75% and two rate cuts. There were actually three rate cuts in 2025. I did predict that they’d lower rates and was extremely close to what happened.
My 2025 stock market predictions
What do I think will happen in 2025?
My prediction is that the S&P 500 will have a 10% return and ends the year at $6,469
I’m predicting that value stocks will outperform growth stocks in 2025
I think small caps are due to outperform large cap
I believe that Gold will do better than Bitcoin
I’m going with US stocks versus international stocks
I’m predicting that there will be three rate cuts in 2025 and the Federal Funds Rate will land between 3.5-–3.75% to end the year.
Listen to hear why these are my predictions for 2025!
Resources Mentioned
Subscribe to the Retire with Ryan YouTube Channel
Episode #183: 6 Market Predictions for 2024
Episode #116: 7 Best Short-Term Investments To Grow Your Money
Connect With Morrissey Wealth Management
www.MorrisseyWealthManagement.com/contact