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Advisors Expect the Stock Market Bull Run To Continue in 2025, But Warn Of Volatility
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Main points
- A recent survey found that more than two-thirds of financial advisors expect the S&P 500 to rise more than 10% in 2025.
- While advisors are generally bullish on the market next year, the vast majority also expect at least one correction.
- Advisors will make changes to clients’ portfolios next year, such as reducing exposure to cash, which has offered lower yields since the Federal Reserve cut interest rates.
Financial advisors expect the bull market in stocks to continue into 2025, but not without turmoil.
More than two-thirds of 650 advisers surveyed by fixed-income securities underwriter InspereX said they expected S&P 500 Index It will grow by more than 10% by 2025. So far this year, the S&P 500 is up more than 25%.
Despite confidence in the stock’s strong returns, advisers warned stocks could be volatile. About 80% said they expected to see at least one correct or more in broad based index.
How to deal with stock market volatility
In response to volatility, 72% of advisors say they are increasing Downside protection to their clients’ portfolios.
More than half (52%) of financial advisors say they will reduce their clients’ cash and cash equivalent holdings in 2025. Since September, Fed has cut its influential federal funds rate twice, causing rates and yields to fall high yield savings account and money market funds fell.
Advisors say they are making up for lost cash income by increasing investments in other securities: 55% of advisors say they are increasing client investments in dividend-paying stocks.
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