Here’s what history has to say about stocks in 2025.
Transcript:
CONWAY GITTENS: What does history suggest about what is likely to happen to the stock market in 2025?
JEFFERY HIRSCH: I’m bullish. Post election year is used to be a negative year for the market used to be one of the worst ones since World War two. It’s been one of the better ones since 85. It’s been the best year of the four year cycle. All the different averages or seasonal patterns that I’m looking at for 2025 have me forecasting about 8% to 12% for the stock market in 2025. Probably a little bit of a dip in Q1, as the new policies, the new initiatives get digested and some disappointments with the new administration come through. And then usual weakness in the third quarter, August, September period.
CONWAY GITTENS: Now the benchmark is up about 20 or more percent in 2024. It was up 20 or more percent in 2023. What does history suggest about what is likely to happen in 2025 when you see such strong gains back to back.
JEFFERY HIRSCH: Yeah, I mean, gains beget gains. We’ve got momentum here. The economic numbers. The technical numbers. Yeah, things are a little bit overbought or had been. This weakness in early December is very seasonally typical. Probably some profit taking and setting up the year end rally. But, it doesn’t suggest that the gains are over 3rd years of bull markets, which is what we’re in right now, usually a little bit stronger. Not a little bit weaker, not quite as strong. So that’s what gets me in that high single digit, low double digit area. I think we’ve got room to run here. I’m worried about 2026, the midterm year, but for 25, I don’t think being up two years in a row has any issues. I mean, we’ve seen lots of three years in a row of big gains.
CONWAY GITTENS: So to you, what gets us there in terms of this. I think you have low single digit return for 20, 25, high single digit, high single digit. What gets us there.
JEFFERY HIRSCH: Several things. I mean, there’s a book I did in a forecast. I made based on my father did called The super boom back in 2010. I predicted that when the Dow was about 10,000, I predicted we would hit 38,820 by 2025, based upon history, inflation and politics and that sort of thing, as well as what I call a culturally enabling, paradigm shifting technology, AI fits that bill. We’re at the early Middle innings in my book. I think that the tech boom is part of it. We’re seeing some broadening. I’d like to see the Russell make a new high, confirm some of that broadening, even though there’s a lot of selective small caps are doing well. The administration pro-business policy is about to come in. The US is strong, the economy is strong. I think the Fed kind of stuck the landing. So there’s a lot of positives. A little geopolitical unrest is a risk, a little high valuations. But I think we can catch up to that with earnings and such.
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