Why the S&P 500 Is 93% Likely to Go Up This Year
Editor's note: Be ready to buy...
Investors are typically reluctant to embrace the uncertainty that comes with putting their money to work following a presidential election.
But according to Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – history shows postelection markets can provide a massive boost for your portfolio.
In today's Masters Series, originally from the January 31 issue of the free Chaikin PowerFeed e-letter, Marc explains why he's still confident on upside for stocks amid the recent market uncertainty...
Why the S&P 500 Is 93% Likely to Go Up This Year
Many Americans don't have a clue what's going on in the stock market...
Last May, the Guardian newspaper and research firm Harris Poll conducted a study. They focused on the average American's beliefs on the markets, the economy, and more.
Importantly, 49% of respondents believed the stock market had gone down in 2024.
That's significant...
You see, at the time of the survey, the S&P 500 Index was actually up more than 12% on the year. And before that, the benchmark stock index rose 24% in 2023.
As astute investors, we know the good times continued...
The S&P 500 eventually gained 23% in 2024. That was its sixth double-digit annual return in eight years.
And yet, the study I mentioned suggests that roughly half the U.S. population is missing this massive opportunity. They're not paying close attention to stocks.
I can't imagine a more financially dangerous disconnect. You don't want to join that crowd.
The U.S. stock market is responsible for some of the greatest opportunities you'll ever see. And worse, if you miss an opportunity, you might spend a decade or more playing catch-up.
I'm here to make sure you always stay one step ahead of half your neighbors.
And folks, as I'll show you today, it's still an exciting time to invest...
2025 is shaping up to be a big year in stocks. And it all starts with the "5x Signal."
The 5x Signal is easy to understand. It triggers when the S&P 500 suffers a single "down" month followed by five straight "up" months.
As we saw in 2024, "record highs" can happen a lot during big bull runs. The 5x Signal doesn't occur as often. Over the past 70 years, it has only happened 30 times.
But notably, it points to even more gains ahead...
In the first 29 instances, the S&P 500 was up a year later 93% of the time. And even when you factor in the two "down" cases, the index had gained an average of 13% a year later.
Here's why I'm telling you all about the 5x Signal today...
This signal triggered for the 30th time in September.
That means we're looking at an incredible opportunity in the coming months. Based on history, the odds are in our favor.
Even better, the election is finally behind us...
When the 5x Signal flashes in an election year, most of the overall market's gains come later. They're essentially pushed into the postelection year – in this case, 2025.
This extraordinary postelection-year surge makes sense when you think about it...
After all, the U.S. stock market loves certainty. But uncertainty plagues election years. It's especially painful toward the end of the year – during the weeks leading up to Election Day.
But then, what happens every time?
Somebody wins.
The American investing public finally learns who will run the show for the next four years. And by Inauguration Day in mid-January, certainty returns to the markets in full.
That just happened, of course. Donald Trump is now officially back in the White House.
That means the biggest potential gains are starting right now. I urge you to tune out all the messy political noise, leave all your fears behind you, and keep your eye on the prize.
History tells us, with 93% accuracy, that we'll see higher stock prices in the coming months.
I believe we'll see a huge postelection stock surge like what happened in 2017 and 2021. The S&P 500 gained 19% and 27%, respectively, in those two years.
As I told Chaikin PowerFeed readers near the end of last month, a Chinese breakthrough in artificial intelligence sent the markets into a frenzy. In that essay, I called out 5,990 as a key support level for the S&P 500.
At least for now, the index seems to be shaking off the uncertainty. It's at about 6,100 today. And it's already up roughly 3% this year.
We should still be careful – like always.
But fortunately, we still have a green light as investors. That's great to see.
Good investing,
Marc Chaikin
Editor's note: With the help of his one-of-a-kind Power Gauge system, Marc is pounding the table on an under-the-radar group of stocks right now...
They recently flashed "bullish" in the Power Gauge. And Marc expects their outlook to keep getting better.
So he has built something that specifically addresses – and takes full advantage of – this very special group of stocks. Get the details on how to position yourself right here.