Some market observers doubt the S&P 500 can deliver a third consecutive 20% return year. Wells Fargo projects a 6,800 level for 2025, implying roughly a 14% return. The outlook into 2026 feels extended and fragile as expectations rise. A retail investor on r/fatFIRE plans to convert about 90% of a 401(k) to cash anticipating a recession. Converting most retirement savings to cash on a hunch is extreme unless unexpected personal financial needs have arisen. Financial-advisor consultation and disciplined planning are advised because emotional, late-cycle decisions can have outsized consequences. Rapid multi-year gains may be unsustainable and could end in correction.
"Some pundits and skeptics have serious doubts about the S&P 500's ability to pull off the hattrick of 20% return years. Wells Fargo ( NYSE:WFC) senior market strategist Scott Wren thinks that such a so-called "three-peat" is probably off the table, with a 6,800 target for 2025, which entails a return closer to 14%. Indeed, that's still a pretty solid return, even if it doesn't stack up to the previous two years."
"The person who posted on r/fatFIRE thinks a recession is coming and wants to convert around 90% of their 401(k) into cash. That's an extreme reaction on a hunch if you ask me. And one that I wouldn't advise unless something significant has changed with their personal financial situation (let's say unexpected medical bills or any other expense that came from out of left field)."
Read at 24/7 Wall St.
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