The stock market in 2025
As of this date, the S&P 500 is racking up another great year on top of the gains in 2023. (See below in the 20% to 30% column)
The main message of this graphic remains the same–the odds favor long-term owners of publicly traded US stocks. But following two extremely good years for stocks, it makes sense to expect less in the months ahead.
This goes double for Dock Street clients. Since the beginning of 2023 our equity portfolios have more than doubled in value. Most of that is fully justified by the earnings gains that underpin those stock prices, but some of those price gains were driven by higher expectations about projected earnings in 2025 and 2026.
A choppy and largely sideways 2025 should not come as a surprise to stock investors.
Obviously, our crystal ball remains as cloudy as ever, so making guesses about the short-term path of stock prices is largely a waste of time. But stock investing involves managing our emotions and it has been a while since we’ve gone through a significant drawdown in our portfolios. If one of those events occurs in 2025, it will not shake our confidence in the vast majority of stocks we own.
Looking further into the decade there are good reasons to remain optimistic. The massive investments in computing power and the productivity gains already evident, even at this early stage, make a good case for a second “Roaring Twenties.” Buckle up.
Best regards,
Daniel A. Ogden
Dock Street Asset Management, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. You should not assume that any discussion or information contained in this letter serves as the receipt of, or as a substitute for, personalized investment advice from Dock Street Asset Management, Inc.
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Our comments are an expression of opinion. While we believe our statements to be true, they always depend on the reliability of our own credible sources. Past performance is no guarantee of future returns.
