Looking back over the last two years is amazing.
We climbed over 20% on the S&P 500 each year.
We haven't done that in almost 30 years.
That is the good news.
The bad news is that we have not had three such years in a row.
That is not to say that we are facing a bear market, but the reality is that the odds are not with us this year.
I would gladly take a half that much gain.
What we tend to find in the markets is that while the average gain is around 5%, it varies
greatly to get that average.
One trite indicator is labeled the Santa Claus rally.
It consists of the five trading days after Christmas.
Four of those recent days were down with only the fifth up.
This is supposed to give one a feel for how the year will go.
I tend to believe that a better indicator is how the whole month of January turns out.
That still means nothing as you saw what happened in 2019, when the pandemic broke out.
It has been a while since we have had a black swan event.
Not looking for trouble but you can't ignore such.
I remember looking at a second home at the coast and kept thinking about the fact that there hadn't been a hurricane in 20 plus years.
Before you could blink, here came Harvey.
I didn't buy on the island, but chose on shore and survived the hurricane with little or no damage.
Good luck had way more to do with that situation.
Warren Buffet has been an advocate for novice investors to just buy the S&P 500 ETF and sit back and reap the rewards.
His belief is that the index beats almost every analyst and money manager year after year.
Well last year, his /Berkshire Hathaway beat the S&P 500.
The thought being though it was one of the few times and he is the Wizard of Omaha. Sometimes the best ideas are the simplest.
There is no denying that this market is focused on AI.
It will drive this market.
I remember during the startup of the internet craze, there were analysts who kept warning that companies were not making profits and were spending far too much capital.
They were not monetizing the investment.
You are hearing the same thing about Chat GPT today.
I am not saying history will repeat itself, but you should always look back at what has happened before.
Just because you don't necessarily understand how something functions doesn't mean it won't change the world.
We are, if nothing else, an evolving species.
I respect diligently evaluating risk, but that does not mean taking it on.
This all much to say that none of us really have a clue what 2025 will bring.
Anything could detour the journey.
It seems that so much is on the positive side versus the negative.
Only time will tell driven by greed and fear.