Mary Ann Bartels, a senior strategist at Sanctuary Wealth, stated that the US stock market may be entering a 'golden age of investing' that could bring excess returns to investors.
In her outlook for 2025, Bartels outlined why she believes the S&P 500 index could more than double from now until 2030.
Bartels stated, 'We believe this is fundamentally driven by productivity gains brought about by artificial intelligence and strong growth in the US economy, aided by maintaining low corporate taxes, low interest rates, and ongoing stimulus from the Biden administration that allows companies to continue to achieve strong profit growth.'
According to Bartels, the current technological revolution in the field of artificial intelligence is remarkably similar to the advancements in internet technology in the 1990s, and even the advancements in radio and automotive technology in the 1920s. Additionally, coupled with the Federal Reserve's interest rate cuts, this suggests that the US stock market may follow a path similar to that of the 1990s or the 1920s.
Bartels said, 'If we are to repeat a boom-bust cycle similar to the 1920s, 50s, 60s, 80s, and 90s, we believe we are in the early stages of a boom, and the stock market will peak around 2029-2030.'
Bartels stated that she expects the S&P 500 index to trade between 8000 and 10000 points by 2030. However, she added that the S&P 500 index could reach 13000 points, which would mean an increase of 118% from current levels.
Bartels said, 'If our predictions are correct, this will be the second golden age of investing in 50 years.'
Sanctuary Wealth's end-of-year price target range for the S&P 500 index in 2025 is between 7200 and 7400 points, which is so far Wall Street's most optimistic forecast, meaning that after a strong rise in 2023 and 2024, the S&P 500 index will again rise 20% in 2025.
The fact supporting Bartels' bullish view on stocks is that measured by the Z-score of the 5-year P/E (a commonly used method for data normalization), market valuations are not close to extreme levels, and both profit margins and corporate earnings growth are on the rise.
Bartels stated, 'For 2025, we expect corporate earnings to continue to expand, especially among tech-related companies, so we believe valuations will not limit stock price increases.'
According to Bartels, another bullish factor for the future of US stocks is the continued accumulation of 'a large amount of cash.'
Bartels emphasized that there is nearly $7 trillion in money market funds, which can serve as a source of purchasing power for stocks.
Bartels said, 'Investors are not all in,' and the margin debt in the stock market does not show that investors have fully bet on stocks.
Bartels said, 'We believe this cash needs to be deployed, and leverage needs to be increased. If our predictions are correct, this will drive stock prices to levels that are almost unimaginable today.'
She said, 'In our view, this is indeed a golden age of investing.'
Article reposted from: Jin Shi Data