The U.S. investment scene, in aggregate, churned out another unusually positive investment experience this past year, with 20+ percent gains heaped on top of 2023's historically unusual gains.

The experts who follow these matters say that ebullient investor expectations rest on the idea that artificial intelligence will improve the economy, help companies achieve unusual productivity gains, and ultimately lead to higher values across the board. This, of course, is unproven speculation, but there are other reasons to be optimistic. The inflation rate has retreated to historical norms, and the Federal Reserve Board seems inclined to cut interest rates by another half a percent. All the predictions of a global recession failed to come true and are now being discredited. The new Congress is more likely to lower tax rates than raise them.

A recent compendium that followed the annual ritual of predicting the year's market returns in advance (always around January 1) found an average forecast of an 8.2% return for the S&P 500 in 2025. The crystal ball watchers are more convinced by the positives than the potential negatives; indeed, not one of the prognosticators forecast a loss in 2025. This is unusual in the face of so many uncertainties: policies initiated by the incoming presidential administration, growing federal debt, wars in Ukraine and Israel, and mounting cyber threats.

The best course has always been to ignore the predictions, positive or negative, and manage your sentiment through what might become, in the months ahead, a choppy investing experience. The alternative is to pull out of the markets into safe assets that pay no interest, which are guaranteed to lose value due to inflation. The threats are real, the uncertainties are always with us, and through it all, patient investors have always been rewarded in time.

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