Editor's note: Every year comes to an end with a flood of predictions for what the market will have in store in the year ahead. And for 2025, these forecasts all see things unfolding the same way. But as Matt Weinschenk – director of research at Stansberry Research – explains, a consensus view is dangerous for investors. In fact, it's likely setting the stage for a market surprise...

Who cares how 2024 ended? Everyone is talking about the new year...

At the end of each year, all the investment banks give their market outlooks for the next 12 months.

As usual, they'll put out a dozen or so pages of elegant forecasting, including an achingly specific target for 2025.

The problem is, it's all an exercise in false precision. These projections are really just thoughtfully crafted noise. And as I'll show, they don't help investors like us...

The S&P 500 Index finished 2024 around 5,880, up 23% for the year. And the big research firms expect it to keep climbing.

Here's what they're forecasting for this year...

Why did Bank of America (BAC) choose the ominous-sounding 6,666 as its target? And does Wells Fargo (WFC) think it's playing The Price Is Right with its 7,007?

I'm not sure... At Stansberry Research, we don't publish such a number.

Now, we do read them as an exercise in due diligence on our part. It's good to see what these banks may be thinking about the year ahead. And there are some insights in the reasoning behind the numbers.

But you shouldn't use these forecasts to adjust your investments. A year is a long time in the markets. And these projections typically turn out to be worthless, often fairly quickly.

Just look at 2024...

Strategists expected a 3% gain, and markets delivered 23%... only off by an order of magnitude.

There are also the poor analysts who published outlooks in December 2019... only to have the pandemic roil markets two months later.

We understand that investment banks have a range of clients – including pensions, insurance companies, and hedge funds. Those clients need numbers to plug into models. So the research firms are delivering what these institutions want.

As an individual investor, though, you should be buying high-quality businesses at reasonable valuations and holding over time.

It doesn't matter if Morgan Stanley (MS) expects the S&P 500 to end 2025 at 6,500 or 6,000 or 500. That number doesn't have a role in your plan for the year.

But good golly, this year's outlooks all march to the exact same tune...

I first saw this highlighted by Warren Pies of 3Fourteen Research.

As he pointed out on social platform X, the S&P 500 targets for the year have clustered very tightly between 6,500 and 7,000. The 6,500 number is particularly popular.

Usually, there's a wider range of opinions.

As Pies explained, we've seen such tight bands only twice in recent history, in 2008 and 2017. And both times, the consensus was completely wrong...

In 2008, everyone was confident the market would rise. But the global financial crisis sent markets crashing.

In 2017, strategists were fairly conservative with an expected return of about 4.5%. But the market soared 19.4%.

The point being, when everyone is confident and the big investment banks have reached a consensus opinion, that's when the market will surprise you.

While it doesn't hurt to read strategists' 2025 outlooks and try to divine some insights on the year ahead, you should never base your investments on such forecasting.

Rather, you should beware the groupthink on Wall Street. After all, markets sure love to blow up a consensus.

Good investing,

Matt Weinschenk

Editor's note: If you're looking to grow your wealth, regardless of what happens in the market – and without relying on predictions or crazy risks – our senior partner Dr. David "Doc" Eifrig just unveiled his No. 1 recommendation for 2025. Making this simple change today could more than double your money. And it's likely the only recommendation you'll see endorsed by the entire Stansberry Research team... Get the full details here.