New Market Tailwinds are Great, but Stock Picking is Key for 2025 Gains
We are just barely into January, and I hope you’re still feeling that holiday glow.
You don’t have to be Nostradamus to predict that people begin to feel grumpy after the first few weeks of the year.
As people get back to work and school, the holiday cheer fades. All those tasks that you put off “until next year” are looming now, waiting to get done.
Then, in late January the credit card bill for Christmas comes in. That’s also about the same time that many people abandon their self-improvement resolutions. Adding to the gloom, we still have months of cold ahead of us until spring.
The Conference Board Consumer Confidence Index® declined by 8.1 points in December to 104.7 (100 is the long-term average). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 1.2 points to 140.2. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—tumbled 12.6 points to 81.1, just above the threshold of 80 that usually signals a recession ahead.
“Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes. Moreover, pessimism about future employment prospects returned after cautious optimism prevailed in October and November,” said Dana M. Peterson, Chief Economist at The Conference Board.
And after two years of 20+% returns for the stock market, more people are feeling less optimistic about stocks.
“Consumers became a bit less bullish about the stock market in December: 52.9% expected stock prices to increase over the year ahead, down from a record high of 57.2% in November. Also, 25% of consumers expected stock prices to decline, up from 21.7%,” said Peterson.
How anyone feels about the market, however, isn’t the most important thing.
Market-beating returns aren’t about how you feel about stocks, but about what you invest in and how you manage those investments. If you need an example of how that approach can help grow your wealth, look no farther than investing legend Louis Navellier, editor of Growth Investor.
And his analysis says investors could see a lot more growth in 2025 – if they are in the right stocks.
Last spring, Louis correctly anticipated two major events:
That Joe Biden would be replaced on the Democratic ticket.
That Donald Trump would win the Presidency.
It shouldn’t be a surprise that Louis was right.
His 40-year plus track record of picking stock market winners is all the proof you need to see that few people have their finger on the pulse of what’s coming next more than Louis.
And he has another prediction he’s making everywhere now. One you’re going to want to hear and take into serious consideration as we enter 2025.
Trump provides new tailwinds to the market
The second Trump administration is going to usher in a new era of economic growth and gains in the stock market.
As Washington, D.C. prepares for the inauguration, Louis has his subscribers poised in the stocks that are going to benefit the most. Here is how he summarized it for his Growth Investor readers.
Much of the uncertainty that caused wild market swings in 2024 has finally diminished – and that’s setting us up for a very prosperous New Year.
The reality is that there’s a lot of optimism surrounding Trump 2.0 and his “drill, baby, drill” and other pro-business policies. As a result, the velocity of money (i.e., how fast money changes hands) has increased recently. This is evident in the money supply, based on M2, which is money in checking accounts and up to one-year deposits.
Stock market appreciation is highly correlated to M2. So, when consumers are out and about spending money, the velocity of money rises, and prosperity naturally rises – and the stock market follows suit.
Here is a one-year chart from the St. Louis Fed illustrating Louis’ point about the M2 increase.
So, where is Louis investing as Trump gears up for his second presidential term? There are a handful of sectors, but high atop that list is energy.
Again, here he is writing to his Growth Investor subscribers.
Trump 2.0 is simply a “godsend” for the natural gas industry.
When Trump takes office in January, the existing ban on federal lands is expected to be lifted by an executive order on his first day back in office. The Biden administration’s attempt to squelch liquified natural gas (LNG) expansion will be over.
The U.S. Environmental Protection Agency’s (EPA) demand that all new natural gas turbine electricity plants “sequester” carbon dioxide will also be lifted, and that will cause a boom in new natural gas-fired electric plants. So, the U.S. will now be able to double its utility grid to better meet the rising demand for artificial intelligence data centers.
But Louis cautions that it’s not as easy as picking one sector.
I wish that I could tell you that we’re in a sector stock market, the truth of the matter is that we remain in a stock picking environment.
Take the technology sector, as an example. NVIDIA Corporation (NVDA) remains an A-rated, strong buy in Stock Grader thanks to its positive forecasted earnings growth and persistent institutional buying pressure. Advanced Micro Devices Inc. (AMD) and Intel Corporation (INTC), on the other hand, receive a D-rating and F-rating, respectively, in Stock Grader.
There are similar discrepancies in nearly every sector. So, again stock picking will remain much more important than sector selection in 2025.
Access to Louis’ Stock Grader system is another benefit of becoming a Growth Investor subscriber.
Subscribers to any of Louis’ publications get exclusive access to his ratings on 5,000 stocks. You’ll get access to the same system Louis uses to find the best opportunities in the market, plus you’ll get the extra analysis Louis himself conducts on each of his picks in Growth Investor to ensure you get only the best of the best.
Even with fresh tailwinds, it’s clear that navigating the market requires a blend of insight, discipline, and strategic foresight. For those willing to embrace these principles, the potential rewards in 2025 could be substantial.
