The stock market was relatively flat over the last week with investors still try to puzzle their way through the Trump/GOP approach to tariffs, taxes, debt, and new statements on inflation & interest rates from the Fed.
Our neighborhood investor club members were as puzzled as anyone when we met for the last meeting of the Spring. Everyone had their own take on what was happening. It was also our last meeting for a while. With so many snowbirds, our next gathering isn’t until the beginning of November.
Since things are so topsy-turvy in the markets, someone suggested we each put in a guess of what the S&P 500 would be when we are reunited 7 months from now. Hopefully, market volatility will settle down by then!
The results show that this is a pretty worried group:
– Low End Prediction: 4,540 / -23.3%
– Midpoint Prediction Average: 5,287 / -8.9%
– High End Prediction: 5,607 / -4.5%
Keep in mind that the latest Wall Street “experts” midpoint prediction average was +4.5% for the year. Our group believed the experts were foolishly optimistic – potentially to promote their own M&A businesses.
I put in 5,868 … just one point off of where we started the year (5,869). After the strong growth in equities in 2024 (+25%) and the relatively high price/earnings position of the market (even after the last 2 weeks), I’d be happy to land at FLAT this year.
As always, none of us really know what’s likely to happen with government getting so involved in the economy. Even if you are in Trump’s cabinet, apparently! Still, it’s interesting that my investment club – a quite successful bunch of individuals that are pretty knowledgeable about investing – are so negative right now.
We’ll see! Have a GREAT weekend!
Image: Pixabay
MrFireStation 
Mr. Market will try to make as many people as possible wrong, so I predict Mr. Market is going to do either much worse than your most pessimistic listed prediction or slightly more positive.
My oldest son is getting excited about the possibility buying bargain stocks. My stock screening for dividend stocks, is starting to bubble more stocks to the surface. But, we have a long way to go before we get to the great bargains seen in 2008 – 2010.
The case for much worse is that the tariffs will cause a huge negative impact. The case for slightly positive is that everyone is already frightened by the tariffs and things will work out better than the fearmongering that legacy media is selling.
The great part of dividend investing is that you don’t need a runup in market price because you are not living on capital gains, in order to grow your income. You are living off current yield.
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That’s not fair! You can’t pick both much worse & much better. 🙂
We had several folks in our group that wanted to do the same thing. The market will return 1 result in early November … what will it be?
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Just like you, I don’t know how this is going to work out. Most of the crowd seems scared and negative were in for very negative returns. The ‘experts’ who seldom give negative ratings were slightly positive. If I had to pick one, then I second your flat for the year return.
Most people, including the ‘experts’ are wrong otherwise the majority of managed mutual funds wouldn’t lag their benchmarks and most mutual fund holders wouldn’t lag the return of their mutual funds because they sell and buy based on emotion. Your pick would be very similar to the method Ken Fisher uses where he looks for holes in the market predictions and chooses the gap that means most people are wrong.
In the meantime, I will stick to buying bargain priced safe dividend stocks to grow my dividend based income.
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If you take Trump at his word (dangerous business, I know), he said he expects to get the tariffs / trade policy hammered out with other countries over the summer. Hopefully, certainty will be restored to the market by Labor Day.
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There used to be a saying amongst the Hamptons Crowd. Sell before Memorial Day and buy back before Labor Day. I personally have seen most of my capital gains in the 1st and 4th quarters. Typical for the out of favor AKA high yield dividend stocks is that many sell-off in December as people who are down harvest tax losses.
April is another downdraft time. My theory is that people are selling to scrape together the funds to pay the man.
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Interesting …! I had never thought about actual ”seasonality” within the stock market. I know people sometimes talk about a “Santa Claus Rally”, but I suppose there are times of the year when people sell / buy disproportionately. I guess I need to read my Gatsby again to get in tune with those East & West Egg Hamptonites!
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