Mary Ann Bartels, a senior strategist at Sanctuary Wealth, stated that U.S. stocks may be entering a "golden age of investing," which could bring excess returns for 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 U.S. economy, supported by low corporate taxes, low interest rates, and ongoing stimulus from the Biden administration, allowing companies to continue achieving strong profit growth."

According to Bartels, the technological revolution in today's artificial intelligence field bears a striking resemblance to the advances in internet technology in the 1990s, and even the advancements in radio and automotive technology in the 1920s, coupled with the Federal Reserve's interest rate cuts, indicating that the U.S. stock market may follow a similar path to that of the 1990s or 1920s.

Bartels said, "If we are to repeat the boom-bust cycles similar to those of the 1920s, 50s, 60s, 80s, and 90s, we believe we are in the early stages of a boom, and the stock market will not peak until 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 could reach 13000 points, which would mean an 118% increase 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 year-end price target range for the S&P 500 index in 2025 is between 7200 and 7400 points, which is the most optimistic forecast on Wall Street to date, suggesting that after strong gains in 2023 and 2024, the S&P 500 will rise another 20% in 2025.

Supporting Bartels' bullish view on stocks is the fact that, as measured by the Z-score of the 5-year P/E ratio (a commonly used method for standardizing data), market valuations are not near extreme levels, and both profit margins and corporate earnings growth are rising.

Bartels noted, "For 2025, we expect corporate earnings to continue expanding, especially among technology-related companies, so we believe valuations will not limit stock price increases."

According to Bartels, another bullish factor for the future of U.S. stocks is the ongoing 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 fully committed," and the margin debt in the stock market does not indicate that investors have fully bet on stocks.

Bartels said, "We believe this cash needs to be deployed, and leverage needs to increase. If our predictions are correct, this will drive stock prices to levels that are almost unimaginable today."

She stated, "In our view, this is indeed a golden age for investing."

Article reposted from: Jin Shi Data