A "Disappointing" Year Ahead For Investors? | Lance Roberts & Adam Taggart

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**Lance Roberts** (0:26)
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**Lance Roberts** (0:30)
If you're going into 2025, expecting another 20% return year, we've had two in a row, by the way. If you're expecting another 20% return year, I think there's a very high risk that you're going to be disappointed.

**Adam Taggart** (0:48)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, welcoming you here at the end of another week, but at the beginning of another year with my good friend, the rejuvenated Lance Roberts. Lance, how are you doing?

**Lance Roberts** (1:01)
I'm good, I'm good. So yeah, starting a brand new year here, two days in. So we're now gonna get into the January statistics, right? So it goes the first five days, so it goes the month. So all eyes will be really kind of focused on that right now.

**Adam Taggart** (1:20)
Yeah. So, okay. So a couple of questions for you around that. One, is this one of the 25 percent of the years where the Santa Claus rally didn't show up? We are on an update that they were talking here, Lance, but S&P is still lower than it was heading into the Christmas holidays. And how many days in the new year does it take for that axiom to usually kick in? Is it the first five days of the year?

**Lance Roberts** (1:47)
No, it's the first two days. So if the market can rally about 1.2 percent. So we're talking this morning, it's Friday. I know that people watching this now, it's Saturday. But so this morning on Friday, the markets were up about 70 bips so far. But if we get to about 1.2 percent by the end of the day on Friday, the Santa Clause will have been considered to be successful. So we'll have a slight positive bias for the markets over the last five days and the first two days of January, which is the typical Santa Clause rally. Now, you've got to take that with a little bit of a grain of salt because again, so when you look at the Santa Clause rally, 24 percent of the time, it doesn't actually occur, right? So there's that 24.7 percent chance that you don't get a Santa Clause rally. And we may or may not get that as of the close of business today. But interestingly enough, so people say, well, if you don't get Santa Clause rally, then that potentially bodes poorly for the next year. So don't have Santa Claus as a bit as a broad wall, then potentially the market is not so good in 2025 Then you have the first five days of January. So goes the first five days, so goes the month. So if that does well, the year does well, historically speaking. So you get decent returns. Now, in a year where you get, here's some interesting statistics. So in a year where you have a failed Santa Clause rally, a positive first five days and a positive month, the year is not so great. It's about 2% return historically. So it's an up year, but it's not a great up year. The problem with that is, is that you have to go back to 2024, the beginning of this past year. We did not have a Santa Clause rally.
We failed the first five days. We had a positive month and a whopper year. So you got to be careful with these statistics. Again, these are based on averages and historical norms, but there's things that can happen that debunk some of those sometimes. And 2024 was a good example where those old axioms really didn't hold up well. Now again, 2025, it may be an entirely different story. We'll see.
But markets are going to focus on this initially, and then we'll figure it out as we go from here.

**Adam Taggart** (4:20)
Okay. Yeah, I mean, all these things, sell in May and go away, Santa Claus rally, so goes the first five days, so goes the year. They're adages, right? They're not universal rules. Okay, so you said in general, no Santa Claus rally but good first five days, you have kind of a meh year, maybe even a little lower than meh, 2 percent. Obviously, last year being an exception to that. Kind of on average, what happens if you have no Santa Claus rally and a negative first five days of the year?