Every year around this time our inboxes are flooded with emails from all the major banks and research houses telling us what the outlook is for 2025.

Each email has a similar format. The strategists talk about things like uncertainty, macroeconomic risks, volatility and fat-tail risks, then they tell us if the market is cheap or expensive based on their earnings forecast for the year.

It seems like a series of impossible asks – describe all of the reasons why predicting the market over the next 12 months is nothing more than a coin toss, estimate the earnings for each company in the index over that same timeframe and then make a buy or sell recommendation based on their calculated earnings multiple (i.e., the current price-to-earnings, or P/E, ratio).

I used to feel sorry for all the strategists on CNBC putting their neck out publicly with their sophisticated-sounding guess work, but it turns out you can make a good living doing it and the market is pretty forgiving when it comes to mistakes.

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