The Only 2025 Market Prediction You'll Need

A couple of decades ago, I realized how critically important predictions are.

Apparently, as a trained market observer, I have a duty to make predictions about the economy, politics, and the financial markets. Millions of people are waiting for this advice.

For the last six weeks, it has seemed that everyone who has ever made a stock trade or walked by a brokerage office has issued a set of predictions to guide us in the year ahead.

As I have done yearly, I shall now issue my Must-Read Predictions for 2025.

Pay close attention because in over two decades, I have never been wrong with my New Year’s predictions.

This year, the stock market will be open most business days between 9:30 AM and 4 PM.

There has been discussion about extending the hours. If that happens, the stock market will be open based on the new rules.

Some days will be declared Holidays and the markets will be closed on those days.

During the year, stock prices will fluctuate, sometimes wildly. Some stocks you have never heard of will soar to incredible heights. Most people will buy them as they top, and money will be lost. Some stocks we all view as untouchable will suffer a large collapse. Most people will sell when they see the headlines and miss the rebound.

Congress will hold hearings on matters of great importance and debate critical topics vigorously when the cameras are on. Little will come of these debates and discussions. Politicians will say nasty things about the opposition.

[Unlock market-moving news, custom trade ideas, and real-time alerts to make smarter, faster trades. Don't miss your chance to save 60%—this End-of-Year Sale ends Today!]

The Federal Reserve Open Market Committee will meet at least eight times in 2025 to make policy decisions.

Fortunes will be lost betting on what the Committee might do and how the markets might respond.

Market makers will make a fortune taking the other side of options trades in the days before the Fed announcements.

If the fed meets more than 8 times it will mean something, somewhere in the financial system, broke

A lot of people will talk about buying low and selling high.

Almost none of them will do that.

I am pretty sure I will be 100% accurate again this year. I am quite sure my predictions will be at least as useful as all the others being regurgitated in the media every day.

Here are my suggestions for 2025.

First and foremost, learn to make volatility your friend and not your worst nightmare. It sounds simple, but embracing volatility contradicts our hard-wired fight-or-flight reflex.

Buying when everyone is selling is hard to do.

It is even harder to sell when everyone you know is talking about the fortune they made in some garbage stock or “poopcoin.” However, it is the most reliable way to make a fortune in the stock market.

You will make far more money reacting to what the market actually does instead of trying to guess what it might do.

If you will trade, have a rules-based system and stick to the rules.

Know your time frame and which rules work best in that frame.

This brings me to one fundamental rule for traders and investors alike.

Years ago, I was fortunate enough to have a long conversation with Victor Niederhofer, one of the best traders of the last fifty years. He said something that has stayed with me and helped me successfully navigate the often-turbulent markets: “If something can be tested, you must test it.”

Many ideas and strategies sound good until you crunch the numbers and realize they simply do not work very well. Some ideas that do not sound like they should deliver market-crushing returns actually do, and only through rigorous testing will you discover these opportunities.

Be aware of the big trends and stories that will create opportunities:

• AI will drive high energy demand.
• Bank consolidation will continue to accelerate under the new administration.
• There is a good chance rates will stay higher longer than we expected just a few weeks ago.
• Commercial Real Estate appears closer to the bottom than the top.

Use your well-tested rules to uncover opportunities to benefit from these trends and others developing in 2025.

Embrace volatility to improve your entry and exit into these opportunities.

I have no idea what will happen in 2025.

I do know that the basic rules of economics and human behavior can be stretched, but they will not break.

When those truths are stretched to extremes, there will be opportunity.

Last Chance for your Trading Edge—Save 60% on Benzinga Pro

Image via Pixabay