Investment Review - February 2025
- Equity markets have carried positive momentum into the start of 2025 with the S&P 500 posting a +2.8% return, the Dow Jones +4.8%, and the Nasdaq trailing with a +1.7% return for the month.
- We are currently in the midst of fourth quarter earnings, with approximately 36% of S&P 500 companies providing results thus far. Earnings are surprising to the positive at a rate of 77%, while revenues have surprised to the upside at a rate of 63%.
- The S&P 500 has experienced a tremendous rally since the third quarter of 2023. Though valuations have stretched, there are many fundamental reasons that explain the market’s strength. One example: 50 years ago, companies comprising the S&P 500 Index had a return on their own investments of approximately 12% versus 20% today (as measured using Return on Equity or ROE).
Key Investment Statistics
Sources: Dow Jones Publishing, FactSet, Bloomberg, Bureau of Labor Statistics, U.S. Federal Reserve, Empirical Research Partners, Yardeni Research
Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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