3 days Ago By [email protected] (Matt Frankel)
I write an article of bold predictions each year, with my thoughts on where the stock market, economy, interest rates, and more are heading. And they are meant to be "bold" predictions, which I define as those that are contrary to the expectations of the majority of analysts and Wall Street experts. Before we dive into this year's predictions, it's important to keep myself honest.
Along with each year's version, I like to hold myself accountable by looking back at the predictions I made a year ago and how they panned out. So, these were my five bold predictions for 2024: The stock market will have a strong year. At the beginning of 2024, the median analyst prediction was for an 8% gain in the S&P 500 .
It is up 28% through Dec. 26, so it's safe to call this one a win. Small-caps and value stocks will outperform.
I was wrong here, as I underestimated how well big tech would do thanks to the AI revolution. The Russell 2000 small-cap index underperformed the S&P 500 by 15 percentage points. Mortgage rates will plunge into the 5% range.
This came close to happening at one point, with the average 30-year rate around 6.1% just before the Fed started cutting rates. But the 5% zone didn't end up happening.
Home prices will increase by a "mid-single-digit" percentage. Zillow ( ZG -1.25% ) ( Z -1.
05% ) was calling for home prices to fall slightly in 2024. They ended up rising by nearly 3%. I'd call this an accurate prediction.
The Fed will cut rates eight times. This ended up being too bold. The Federal Reserve started cutting rates in September and has done so at every meeting since then, but I figured the cuts would start earlier in the year.
Last year, I was two out of five. Not my best result. The most accurate result I've had was going 4-of-5 with bold predictions in 2022.
But keep in mind that these are meant to be bold predictions, which are by definition not terribly likely to happen. It's also worth noting that I don't necessarily think the other three will end up being wrong , but that they have a delayed fuse thanks to the Fed's late start with rate cutting. And that brings me to my bold predictions for 2025.
5 Bold predictions for 2025 Without further delay, here are five things I think have a better chance of happening in 2025 than many experts seem to think: I don't expect to be 5-for-5 As mentioned, these are intended to be bold predictions. I'm fairly certain they won't all be correct. But these are things that (in my educated opinion) have a better-than-expected chance of happening this year.
.
