International markets and bonds have provided the most stability this quarter, with the MSCI International Index gaining 6.35% and bond prices rising due to falling interest rates. Portfolios that are diversified across asset classes and geographies have held up the best.
A recent study reviewed the 2024 S&P 500 return estimates from 20 prominent banks and asset managers, made at the end of 2023. The closest estimate was off by 12% and the median prediction missed by 23% versus the actual return. Be cautious with forecasts for 2025.
A recent Vanguard study highlighted the difficulty in market timing: If an investor invested $100,000 from 1996 to 2024 into a balanced 60/40 portfolio and left it alone, it would be worth $865,000. If they tried to time the market and missed out on just the best 5 days, they would be left with $659,000. Similarly, they would have $540,000 if they missed just the best 10 days.