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February 14, 2025 by Michelle Morris

Are Stock Market Predictions Useful?

*spoiler alert: No, they are not.

As I write this on the morning of February 13th, 2025, we are almost 6 weeks into the New Year and so far the S&P 500 is up 3.12% in 2025. 

The S&P 500 is a group of about 500 of the largest publicly traded stocks in the United States.  It includes big names we’ve all heard of such as Google, Tesla, and Apple.  It also includes many companies you may not have heard of such as Idexx Laboratories.  They “help pets lead fuller lives by giving veterinarians the tools, technology, and insights to see clearly and get the answers they need.”

How will this group of 500 stocks do the rest of the year?  I do not know, and crucially, neither does anyone else.

Let’s look back at 2024.  Dimensional* (a mutual fund company I use to invest some of my and my client’s money), recently put out a marvelous piece called “Prediction Season”, stating the new year is a great time to tune out predictions from the financial industry.

In the piece, Dimensional points out that the S&P 500 Index rose by 23.3% in 2024. 

They go on: “this far exceeded expectations from analysts polled at the end of 2023, none of whom believed the S&P would grow by its historical average rate of return, 12.3%.  In fact, nearly half of the analysts predicted a negative year…”

Hopefully analysts at JPMorgan didn’t “eat their own cooking” so to speak and divest their portfolios from the US stock market.

I don’t recommend making asset allocation decisions based on forecasts.  

Instead, create an asset allocation based on your particular set of circumstances.

Then:  Save, Invest, Repeat.

Rebalance regularly, as this is a disciplined way to buy low and sell high.

Ignore the noise and live your life!

*I do not receive any compensation from Dimensional

Topics: Filed Under: Investing

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From The Blog

  • How Much Federal Income Tax Do You Actually Pay?
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  • Are Stock Market Predictions Useful?
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From the Blog

  • How Much Federal Income Tax Do You Actually Pay?
  • How Much Does your Employer-Sponsored Health Insurance Actually Cost?
  • Are Stock Market Predictions Useful?

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Investment advisory products and services are offered through advisory representatives of BRIO Financial Planning, an investment advisor registered with the Commonwealth of Massachusetts.

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Michelle Morris, CFP® EA
BRIO Financial Planning
1073 Hancock St. #101
Quincy, MA 02169

michelle@briofp.com
617-934-0419 (phone)
617-934-1933 (fax)

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