Where The Market May Be Headed Next

Summary

• I expect the market’s positive momentum to continue short-term, but gains for 2025 will likely be modest at 6-7%.
• Rising tariffs and mounting debt pose significant risks, potentially driving up interest rates and dampening economic growth.
• Historical data shows that strong market years are almost always followed by below-average returns, supporting my cautious outlook.
• My Bayesian models and intuition both indicate that after two strong years, investors should expect sub-par market performance through 2025.

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Introduction

For the next few weeks or so, I expect the momentum of this market to stay positive. The economy is chugging along, albeit at a slowing pace. Inflation seems to be inching higher but not running away. Jobs are

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.