Bank of America warns of potential market headwinds in 2025 due to stretched valuations.

From Investing.com: 2024-12-21 04:30:00

Bank of America warns investors of potential headwinds in 2025 due to market momentum and stretched valuations. Risks include geopolitical tensions, rising debt, and market fragility highlighted by the VIX. Opportunities in Europe, China, and Japan exist, but volatility, trade disputes, and macroeconomic uncertainty will shape the market cycle.

Key lessons from 2024 highlighted by BofA:
1. Strong market performance in 2024 may just be the beginning.
2. 2024 resembled steady gains of 1996-97, not bubble peaks of 1998-99.
3. Market leadership can persist in a bubble environment.
4. High valuations and strong momentum may lead to a potential bust.
5. Markets are fragile, indicating a major shock may be imminent.
6. Strategies like buying market dips and using skewed delta positioning may be crucial for 2025 success.



Read more at Investing.com: 14 lessons from 2025 to remember in 2025: BofA By Investing.com