The article highlights investors' concerns regarding future S&P 500 returns after two successful years, speculating on possible downturns and recession fears. Scott Wren forecasts a modest 10% return for 2025, while discussions on Reddit point to extreme measures like liquidating 90% of 401(k)s due to anxiety. The text underscores the risks of market timing and the tendency for emotional decision-making to lead to poor investment outcomes. It reassures that recent S&P 500 gains, though impressive, are consistent with long-term expectations rather than a speculative bubble, encouraging rational evaluation over fear-driven choices.
Investors, after two strong years from the S&P 500, are apprehensive whether 2023-2024 momentum can persist, amidst fears of a possible recession.
After impassioned discussions on r/fatFIRE, one member's drastic 90% withdrawal of their 401(k) underscores how fear can skew financial behavior.
Market timing is fraught with challenges; even experienced economists struggle with recession predictions, making quick, emotional decisions risky.
Despite recent gains appearing robust, the S&P 500's performance still aligns closely with long-term return expectations, indicating we're not in a bubble.
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