Fisher Investments Reviews Why 2024 Market Trends Aren’t Predictive for 2025

Transcript

Ken Fisher:

So, as we face the end of the year, kind of thinking about next year— until really about the third week in December, I never really get the beginnings of my 2025 or next year forecast put together well enough to be very confident in it. There's a lot of stuff I have to gather together to be able to do that, and that'll happen.

But in the interim, as we think of the year as it's positioned itself so far, with only a few weeks left to go, it's important to remember that you shouldn't bias yourself in thinking forward, that either the things that have been happening in trends will continue, or that they won't. Let me take you to that in terms of things I hear all the time. This year, in 2024, overall, growth stocks—and particularly, big growth stocks, mega—have done better than other stocks. And so, some people have said things like, it's really only a handful of stocks that are up, and most of the rest down. In prior videos throughout the year, I've shown you that that's not true, that when you look around the world in places where there's little growth or no tech at all, not all countries, but most country markets have actually been hitting all-time highs.

It's been a fairly broad bull market, but can we say right now that growth will do better or value will do better because growth did better so far this year? No, because in fact, over the last few weeks, value has been doing better than growth. And does that mean value will do better next year, then growth? No, that doesn't mean that either. What I'm wanting you to see is, it's always a mistake to extrapolate what's happened into what will happen. And when you look into a new year, you always want to look at it with unbiased eyes, looking at the year not as if the year that just is ending didn't happen. But recognizing that it's not the controlling feature.

Then again, going a different direction, there's the people that react with the notion that whatever the trend has been, they should be a contrarian against it and think that the reverse will happen. So, for example, there have been a lot of voices that have said that, well, we had two pretty big years in a row in 2023 and 2024. Therefore, it's really unlikely we have a really big year in 2025. I just want to tell you that when you study history, there's no particular reality to that statement. That is, there's a lot of years where two big years in a row and then you don't get a third, but there's some where you get years that roll on for three and four.

And to make a long story short, which I don't need to belabor, you know, the average bull market in history is about three-and-a-half-years. So, if you think about, if the beginning of the bull market was to be, let's say, in December, I'm just making that up out of thin air, then it would be logical to expect three pretty big years in a row. But again, I want you to think through the notion that as we think of this year in review, we need to remember to neither assume it continues as was or that it doesn’t and look at it with fresh eyes. I want to thank you because most people, in my opinion, do tend to try to either extrapolate trends from the past into the future or presume their reversal, and there's no particular reason that either of those necessarily happen.

So, thank you. Thank you. Thank you for listening to me all this year. Later on, we'll get to the point where I put out my annual forecast for the year ahead. We're not going to be there until just about Christmas time. But thank you for for listening all this year. And I look forward to trying to produce these for you throughout 2025 and give you the very best guidance that I possibly can.

Thank you much.