- The stock market may be entering a "Golden Age of Investing," strategist Mary Ann Bartels says.
- AI productivity gains, lower taxes, and fiscal stimulus could drive significant S&P 500 growth by 2030.
- Bartels predicts the S&P 500 could reach 13,000 by the end of the decade.
The stock market could be entering a "Golden Age of Investing" that delivers outsize returns for investors,veteran strategist Mary Ann Bartels of Sanctuary Wealth said.
In her 2025 outlook, Bartels outlined why she believes the S&P 500 could more than double between now and the end of the decade.
"We believe this is fundamentally driven by the productivity gains from AI and a strong U.S. economy, aided by maintaining lower corporate taxes, lower interest rates, and the ongoing stimulus from the Biden Administration's pieces of legislation that allows companies to continue to post strong earnings growth," Bartels said.
According to Bartels, there are uncanny similarities between today's technological revolution in AI and the technological advancements of the 1990s with the internet and even the 1920s with the radio and automobiles.
That, combined with the Federal Reserve cutting interest rates, suggests that the stock market could follow a similar path to the 1990s or the 1920s.
"If we are to repeat this cycle of boom-bust similar to the 1920s, 1950s, 1960s, 1980s and 1990s, we believe we are in the early stages of the boom and that the equity market will not peak until 2029-2030," Bartels said.
Bartels said she expects the S&P 500 to trade between 8,000 and 10,000 by 2030, but added that it could reach as high as 13,000, representing potential upside of 118% from current levels.
"If we are correct, this would be the Golden Age of investing for the second time in 50 years," Bartels said.
For 2025, Sanctuary Wealth has an S&P 500 year-end price target range of 7,200 to 7,400, which is, so far, the most bullish outlook on Wall Street and would represent another 20% up year for stocks following the strong returns seen in 2023 and 2024.
Supporting Bartels' bullish view on stocks are the facts that market valuations are not near extremes, as measured by the 5-year Z-score on P/E multiples, and that profit margins and earnings growth are rising.
"For 2025, we expect earnings to continue to expand, particularly in technology-related companies, so we don't believe valuations will constrain equity prices from moving higher," Bartels said.
According to Bartels, another factor that is bullish for the stock market going forward is the continuing buildup of a "mountain of cash."
Bartels highlighted that there is nearly $7 trillion sitting in money market funds that could serve as a source of buying power for stocks.
"Investors are not all in," Bartels said, adding that margin debt in the stock market also isn't signaling investors have gone all in on stocks.
"We believe this cash needs to get deployed and leverage needs to build. If we are correct, this will drive equity prices to levels that are almost incomprehensible today," Bartels said.
"This is truly the Golden Age of Investing, in our view."