In the markets, winning begets winning.

When earnings are rising, they tend to keep rising. When fundamentals are improving, they tend to keep improving. And when prices increase, they tend to keep increasing.

Just about everything in finance follows trends. And when the trend is in your favor, it’s like sailing with the wind at your back.

We’re living in one of those moments right now. Despite some ups and downs, 2025 is on track to be another fantastic year for investors. And given all that winning, we can expect more gains as we round out the year.

In fact, it’s a near certainty that stocks will hit new all-time highs by year-end.

Let me explain…

Stocks Finish Strong in Years Like This
This year will go down as an odd one for investors. First, tariffs brought extreme volatility and a near bear market. Then, stocks marched higher for months while barely taking a breath.

Despite being painful at times, it turned out to be a profitable year.

The S&P 500 Index was up about 17% through its all-time high at the end of October. And we’re only slightly below those highs today. Take a look…

Many investors look at these hefty returns and assume the worst. They assume the bull market is running out of steam… and that it’s only a matter of time before the bottom drops out.

It’s understandable – especially since the rally is taking a breather. But remember, winning begets winning.

Panic selling is the exact wrong thing to do in this environment. A 15%-plus gain through October is an incredibly bullish sign. When that happens, stocks almost always continue rising through the end of the year.

To see it, I ran the numbers since 1928. Over that near century of data, stocks have soared 15%-plus through October in 28 years. So this kind of extreme isn’t as rare as you might think.

Still, the main thing is what happens next. Take a look…

Markets follow trends. So when stocks are up big through October, they tend to finish stronger.

The typical return over the next two months is only 2.1%. But after a run-up through October like we saw this year, that return more than doubles to 4.7%.

And the winning tends to continue… After this extreme, the six-month return rises to 6.2%, which is hefty outperformance versus the typical buy-and-hold result.

What’s more, after these cases, stocks were only down in November and December once since 1945. And in the entire history since 1928, the win rate was an impressive 86%.

So far, the S&P 500 is down this month. But history tells us that will likely reverse… leading to a year-end rally of around 5%.

That kind of gain would surprise a lot of investors. It would push the S&P 500 above 7,000. And it would result in an overall gain of more than 20% for 2025.

That probably seems ambitious. But this is a winning market… And we can, and should, expect that trend to continue.

Good investing,

Brett Eversole

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Source: Daily Wealth