Stock Market Commentary February 2025

Tax Season is Here!

Please remember that if you have a non-retirement account, the documents typically arrive in the 3rd or 4th week of February, so scheduling your tax prep on March 1st or later is the most safe path.

Market Indicators for 2025

January has come to a close, and it was a good month! Past performance cannot predict future performance, but there are three indicators that are watched closely by many stock market prognosticators over the next month:

The Santa Claus Rally – Finished Mixed
The First Five Days of January – Positive
The Month of January – Positive

What Historical Trends Suggest

The first five days of January were positive. According to the Stock Trader’s Almanac, a positive calendar year is predicted at 83% of the time, and the average gain across all 48 years was 14.2% per year.

The last indicator, the month of January, was also positive, which is a good sign also for the full calendar year historically. The old saying on Wall Street is: “As January goes, so goes the rest of the Year” and we’ll see if that applies this year.

Sometimes, rules of thumb like this, while they don’t make any sense on the surface, become a self-fulfilling prophecy if enough people follow them.

Consumer Staples and Market Sentiment

Another trend worth mentioning that is occasionally helpful is that if you compare the Consumer Staples index performance to the S&P 500 performance.

When people are scared, they sometimes invest in toilet paper, pasta, soap, and everyday necessities that tend to be profitable in good or bad times.

When times are good, these “safer” stocks do not always perform the best, so the fact that people are not “rushing to safety” is a good sign in our opinion.

Election Years and Market Performance

From 1928-2020, the stock market has typically gone up in the year after a Presidential election when an incumbent party loses. If the incumbent party lost, the stock market is typically up 8.6%. These numbers are below the historical averages, so the first year of a presidential term is positive on average but not as much as other years. These numbers are below the historical averages, so the first year of a presidential term is positive on average but not as much as other years.

Speak With a Trusted Advisor

If you have any questions about your investment portfolio, retirement planning, tax strategies, our 401(k) recommendation service, or other general questions, please give our office a call at (586) 226-2100. Please feel free to forward this commentary to a friend, family member, or co-worker.

If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it. We would love to meet with you over the phone, via Zoom, or face-to-face to strategize.

Sincerely,

with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel Ladzinski

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Notes & Disclaimer: Investment advisory services are offered through Summit Financial Consulting LLC, an SEC registered investment advisory firm. Summit Financial Consulting Investment Advisory Firm Representatives do not render tax, legal, or accounting advice. Life/Annuity Insurance products and services offered by the individual insurance agent. Health insurance is offered through Summit Health Services, LLC and Property/Casualty (P&C) Insurance is offered through Summit Insurance Services, LLC and our local P&C agency partners. Please update Summit Financial Consulting LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually, but additional copies are available upon request. Investing involves risk, including the risk of a total loss. Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. Dividends are not included in index returns. This information is provided “AS IS” without any warranty of any kind. Past performance is no guarantee of future results. Representatives of Summit Financial Consulting LLC offer tax preparation services through Summit Tax Services. Summit Tax Services is a DBA of Heemer Klein & Company and they are owned and operated independently.