The S&P 500 is in the middle of a roaring bull market right now. Over the last five years, the index has risen about 90%, helping long-term investors such as me build wealth.
Wondering what lies in store for the index in 2025? Here’s a look at some of the latest forecasts from Wall Street analysts.
Further gains on the horizon?
In the table below, I’ve put the 2025 S&P 500 forecasts from seven major financial institutions. Note that these are year-end targets:
Firm
2025 target
Morgan Stanley
6,500
Goldman Sachs
6,500
UBS
6,500
BMO Capital Markets
6,700
Deutsche Bank
7,000
JP Morgan
6,500
BofA
6,666
Looking at the figures in the table, Deutsche Bank has the highest forecast at 7,000. The average of the seven firms however, is 6,624.
Given that the S&P 500’s trading at 6,047 today, it’s clear that the consensus view is that the bull market will continue. Looking ahead, it seems firms expect the index to rise another 10% or so over the next year and a bit.
I’m bullish
I think that’s reasonable. For a start, economic conditions in the US are likely to be healthy next year (Donald Trump’s economy-friendly).
Secondly, we’re in the midst of a powerful tech revolution, which is helping a lot of companies generate top and bottom-line growth. Additionally, there’s room for the market rally to broaden out.
Of course, there are no guarantees the bull market will continue. In the short term, the stock market’s very unpredictable. If we were to see an unexpected ‘black swan’ event, the index could fall.
How to gain exposure
But let’s say the US market does rise next year. What are the best ways to get exposure to it? Well, one option to consider is a S&P 500 index fund such as the Vanguard S&P 500 UCITS ETF (LSE: VUSA).
This product”s designed to track the index. So if the S&P 500 rises, it should rise too.
It’s worth noting that with this ETF, exchange rates can affect returns for UK investors due to the fact that it tracks a US index. For example, if the S&P 500 was to rise 10% in 2025 but the pound gained 3% against the US dollar, returns for UK investors would only be around 7% (ignoring trading and platform fees).
Overall though, there’s a lot to like about this product, in my view. Not only does it provide exposure to all the fantastic stocks in the S&P 500 (eg Apple, Microsoft, Nvidia, etc) but annual fees are very low at 0.07%.
Of course, another option to consider is investing in individual S&P 500 stocks. This approach is riskier, but there’s potential for larger gains.
I have no doubt that there will be plenty of stocks that outperform the S&P 500 by a wide margin next year and deliver gains of 20%, 30%, 50%, or more. Some US stocks I’m bullish on include Amazon, CrowdStrike, and Uber (if you’re looking for more US stock ideas you can find plenty here at The Motley Fool).
I’ll point out that there’s nothing to stop investing in a tracker fund and buying a few individual stocks in the hope of generating higher returns. This is what I do, and the strategy has worked well for me in recent years.
The post Here are analysts’ S&P 500 forecasts for 2025 appeared first on The Motley Fool UK.
Pound coins for sale — 31 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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Edward Sheldon has positions in Amazon, Apple, CrowdStrike, Microsoft, Nvidia, and Uber Technologies. The Motley Fool UK has recommended Amazon, Apple, CrowdStrike, Microsoft, Nvidia, and Uber Technologies. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
