A Record Rally Could Be Taking Shape

A Record Rally Could Be Taking Shape

The stock market is showing strength as we head into the final weeks of the year, thanks to favorable seasonal trends. Despite some uncertainty following the Thanksgiving weekend, stocks are on track for a remarkable year. With gains of 27.3% so far, this could shape up to be one of the strongest rallies in recent history. Historically, only a handful of 12-month periods have delivered returns above 30%.

Looking ahead to 2025, investors should prepare for more back-and-forth movement in the markets. Stock valuations are high, leaving little room for error if economic or geopolitical turbulence arises. The incoming president-elect’s pro-business policies—such as reducing regulations, cutting taxes, and encouraging domestic production—are promising for the market's long-term prospects. However, as with any ambitious policy agenda, there could be bumps along the way.

Insights for Investors:
While it's exciting to ride the wave of a historic rally, this is a good time to evaluate your portfolio. Think about locking in some gains or rebalancing toward sectors that might benefit from the new administration's policies, like industrials or tech. Also, don’t overlook diversification—while U.S. stocks have been the star of the show, international equities could shine if global growth picks up. Finally, keep a close eye on inflation data and interest rate expectations; these will play a big role in shaping market trends in the year ahead.