The economic situation has not been the greatest over the last couple of years as a result of the continuous fluctuations and inflationary pressures affecting marketplaces and causing currencies to lose their value. Living costs have been climbing, and many members of the general public have found it difficult to keep up with daily expenses, with savings and leisure taking the backseat for many. As a result, an ever-growing number of people have started considering the possibility of starting investment portfolios as a means to secure their money and make the most out of what they have instead of seeing it essentially go down the drain.
Some have even started looking into how to buy Bitcoin with a bank transfer, as the riskier asset has started looking increasingly attractive to those who want to secure their funds into something whose value is almost guaranteed to continue appreciating over the long term, despite the fluctuations that are bound to occur along the way. With the current Bitcoin price drawing interest, many have begun to wonder what they can expect from 2025. After all, a successful trader knows that being knowledgeable about the potential market trends is the best way to create a robust strategy that allows them to remain profitable.
Bull Market
Most investors have been hoping for a bullish trading market in 2024, which allows them to acquire considerable gains and keep growing their portfolios. Their predictions turned out to be true, and some analysts consider 2024 to be part of an ongoing, secular bull market. This concept refers to a marketplace that is governed by forces that remain in place for a prolonged amount of time and which cause the price and value of a specific asset to continue climbing over a significant amount of time. The favorable conditions typically involved in the creation of bull markets of this type are solid corporate earnings and low interest rates. These factors tend to push the stock prices higher.
From a long-term perspective, the current secular bull market started as early as 2009 and is now rivaling the duration of its peers from the 1950s and 60s, as well as those of the 80s and 90s. However, economists point out that it nonetheless remains more moderate in scope compared to its predecessors in both scale and length. When looking at it on a more short-term scale, the smaller bull market has been going on for around twenty-four months and contains significant growth for shares that have set the pace within the rally so far. Much of the bullish market has been quite textbook in this sense, but what does that mean for its future, and what can investors expect from the upcoming year?
What Comes Next?
Investing can be a slippery slope as prices tend to move and fluctuate quite a lot, and keeping up with them is often difficult. This is why the main piece of advice all experienced traders will provide you with is to invest only as much as you’re prepared to lose since there’s no certainty that you will see gains from the endeavor. A certain level of risk is involved in all trading, which is why it’s better to be cautious and avoid making impulsive decisions. This can be easier said than done, especially if you feel like you’re about to miss out on the opportunity of a lifetime.
It’s important to learn how to keep your composure and remain disciplined when trading to avoid the pitfalls of rushing in and making mistakes. Some investors have to learn this lesson the hard way by acquiring losses that they then have to work to repair. In the upcoming year, interest rates, earnings, and valuations will remain the primary market drivers. Right now, the earnings season outlook shows growth of around 10% in 2024, with 2025 expected to go even higher than that. Interest rates have started decreasing, although more slowly than predicted earlier this year.
The Standard and Poor’s 500, an index that keeps track of the stock performance recorded by the 500 largest businesses listed on stock exchanges in the US, has climbed by more than 60% in the past two years. Back in October 2022, the index hit a low of 3,577.03. This has happened considerably faster than expected, causing Wall Street to raise year-end targets several times in order to keep up with the new data. So far, there are relatively few signs of the market slowing down, although the last few months have been somewhat irregular. Geopolitical risks remain a concern, but US stocks remain close to their peak levels of 2021.
The beginning of September recorded a temporary slump, which nonetheless attracted investors, as lower prices were seen as an excellent opportunity to buy more.
Bear Market
There have been discussions of an underlying bearish trend for quite some time now, and while there are many who believe a downswing scenario isn’t likely for the 2025 marketplace, others are convinced that it is bound to happen as a result of the rate cuts that are considerably smaller than the initial estimations, an artificial intelligence bubble and the general trends of the United States economy, which appear to be undergoing a slowdown. As a result of these factors, a bear market is likely to take place at some point in 2025. But how extensive will it be, and how long is it going to last?
The current estimates indicate that a decrease of around 20% will likely occur. Some analysts believe that it isn’t entirely out of the question for the decrease to start as early as the last days of 2024. The employment situation has stoked recession fears, so it is definitely not out of the question for a market sell-off to occur and be quite steep. For the interest rates to drop, the economy has to slow down, the labor market will have to be less active and intense, and the margins need to come under pressure.
Estimating how the marketplace will turn out is not easy since there are so many factors to consider. Those who want to ensure their trading ventures are as successful as possible are nonetheless interested in what the future has to offer so that they can prepare themselves and ensure their portfolios stay safe.