Wall Street's crystal ball problem for New Year

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Wall Street's top firms have released their S&P 500 predictions for 2025, projecting an average gain of 9.1 percent. But a 25-year analysis of 376 broker forecasts reveals a striking pattern of playing it safe – 53 percent of predictions cluster between 0 and 10 percent, despite actual market returns being far more volatile.

Reality regularly defies these cautious predictions. In seven of the past eight years, market returns fell outside the range of all compiled forecasts. Analysts' predictions missed the mark by an average of 15 percentage points, with even the most accurate firms being off by 10 points. Notably, 57 percent of forecasts underestimate market performance.