Year End S&P 500 Target & More

The Fed followed through on expectations with their first rate cut back in mid September. Even more promising is the outlook for another 1.5% worth of cuts between now and the end of 2025. 

This catalyst helped push the S&P 500 up to new record highs. Even better was seeing the gains broaden out to many of the overlooked Risk On small and mid cap stocks. This certainly had a positive impact on our portfolio that was built for exactly this environment. 

We are going to spend some time today talking about what’s next for the market and what that means for our investment strategy.

Market Commentary

The bulk of what really needs to be said today was spelled out in great detail in my recent presentation you can watch now:

2025 Stock Market Outlook >

The very abbreviated version of above is that we are in a bull market that has run a long way in the past 2 years and about to take a rest. This is a very common occurrence in year 3 of a new bull market. 

So the average stock may be lackluster, but the best stocks will most certainly rise. Our goal is to lean into our 4 step stock picking process to find as many of those best stocks as possible. I very much like our odds for that to come true in the year ahead. 

In the near term I see 2 positive catalysts on the way to end 2024 on a high note. 

First, is that every 4 years the market seems to surge after the election has been finalized. It makes no difference if Democrat or Republican. The simple fact that the uncertainty over the election has been removed and this typically leads to more people hitting the buy button. 

On top of that is the annual tradition of a Santa Claus rally which typically has December being one of the best months for stock investors. 

The sum total of these catalysts give us a real shot of hitting 6,000 for the S&P 500 before we close the books on 2024. For as appealing as that might sound, I would not be surprised if the small caps in the Russell 2000 rise 2X more given how much catch up they have to match their large cap peers. 

This peak of 6,000 will likely be a place of serious resistance that we likely struggle with time and time again in 2025. 

Yes, the Russell 2000 will do better...probably a lot better. But it will not be a smooth ride. 

Meaning, do not expect a calm year of the market being flat. 

Expect ample volatility with nasty pullbacks and corrections followed by big bounces with a net result close to flat on the year.

Those who see this coming will have the proper patience to weather any storms. 

Those who focus on smaller stocks...economically sensitive stocks...stocks that benefit from lower rates...and value stocks will outperform. 

Gladly, our market outlook and game plan has called this right with the market turning quite favorably in our direction. 

When the facts change...so too will our game plan. 

Yet at this moment I believe we are perfectly aligned with market conditions. This explains the recent outperformance of our portfolio. More on that joyous topic to follow...

What To Do Next?

Discover my Zen Investor portfolio filled with 14 top stocks with tremendous upside potential. 

What these stocks have in common is that each has made it through the gauntlet of our proprietary 4 step process that weeds out weaklings leading to more 100%+ winners. 

If you are curious to learn more, and want to see my current top 14 stocks, then please click the link below to get started now. 

Discover the Zen Investor & Top 14 Stocks >

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)

Editor of the Zen Investor

Want to get in touch? Email us at news@wallstreetzen.com.