This is about as bullish a year as you will find. Only 1 year in the past decade rivals this one and that would be the 28.9% gain for the S&P 500 (SPY) back in 2019. We are very close to topping that in the closing days of 2024.
Rarely does the market have back to back strong years like this EXCEPT at the beginning of a bull market as we already enjoyed. Unfortunately history is not kind to what this means for the following year as breakeven or less is not unusual.
Don’t worry...I am not calling for a bear market to unfold. Just saying that this bull will likely enjoy a well deserved rest in 2025.
Gladly there is a path to outperform and generate attractive gains even in a lackluster environment such as this. I will share my roadmap in this week’s Reitmeister Total Return commentary below...
Market Outlook
In my recent presentation, 2025 Stock Market Outlook, I go in depth on this historical pattern of why year 3 of a new bull market is usually quite tame. You can watch a replay here >
That pattern looks on course coming into the new year. That’s a sad state of affairs for the average index or mutual fund investor. Yet good news for stock pickers with a proven edge.
Yes...I am most certainly talking about those who have the benefit of the POWR Ratings system on their side. Rain or shine this system reviews 118 factors for over 5,300 stocks.
Even in the worst of times it will point out the top 5% (aka A rated Strong Buys) that have the goods to outperform. That’s because investors don’t run away from all stocks in those sub-par years...they just spend their time being more selective. The main qualities of their favorite stocks are:
- Industries set to excel in current economic environment
- Healthy profit growth (as proven by their quarterly earnings reports)
- Attractive valuation
That last part has been a bit overlooked as the bull parade stampedes to new highs. Meaning the gains are coming too easily right now and valuations don’t seem to matter. But once profit taking season starts in January to take some of these big gains off the table (and delaying the tax consequence for a year)...THEN valuations will start to matter.
Gladly the Zen Ratings has any eye towards all 3 levels of what investors will want to focus on in the new year.
Let’s start with the best industries. I would say the best way to quantify that is the companies with the best financial outlook. This shows up in many of the 118 factors analyzed by the POWR Ratings model.
So, the industries where you find the individual stocks with the best POWR Ratings are thus the highest rated industries to focus on with the POWR Industry Rank.
Next the Growth and Quality aspects of the POWR Ratings model GREATLY increases the odds of buying a company that will have forthcoming beat and raise earnings reports. In fact, the 13 Growth measures in the model are focused on the consistency of growth in the past for revenue, profit margins, cash flow and Earnings Per Share.
Studies have proven that the consistency of this growth in the past increases the odds of consistent growth in the future. This leads to the joy of more earnings beats and less earnings misses. That is a gift that comes around 4 times a year to propel the best shares higher.
Lastly is valuation. Once again, the POWR Ratings does a masterful job of looking for value. Not just PE...or Book Value...or Price to Sales.
How about 31 different factors of value. Even better is 31 different factors of value that each have proven to point to share price outperformance in the weeks/months that follow. And that is precisely what you will find inside the POWR Ratings model.
I really believe, that 6,300 is about as high as the S&P 500 will get in the coming year with most of the time spent under 6,000 (yes, lower than it is today). Thus, the path to 2025 stock market profits has to be built by finding better stocks. The POWR Ratings will do a wonderful job lighting that path for you.
I shine a flashlight on my favorite POWR Ratings picks in the next section...
What To Do Next?
Discover my current portfolio of 10 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999).
All of these hand selected picks are all based on my 44 years of investing experience seeing bull markets...bear markets...and everything between.
And right now this portfolio is beating the stuffing out of the market.
If you are curious to learn more, and want to see my top 10 timely stock recommendations, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top 10 Stocks >
Wishing you a world of investment success!
SPY shares rose $0.07 (+0.01%) in after-hours trading Tuesday. Year-to-date, SPY has gained 28.25%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
Investors: Are You Ready for 2025? StockNews.com
