Wall Street's top "bull" named investors' biggest mistake in 2025
Tom Lee, co-founder of research firm Fundstrat Global Advisors and chairman of BitMine Immersion Technologies, known for his optimistic forecasts, told MarketWatch in an interview where he thinks investors have been wrong this year.
According to Lee, the main mistake investors made in 2025 was perceiving President Donald Trump's policies as "uncertain and unpredictable" and thinking they would hurt the stock market. Especially, he noted, investors misinterpreted the so-called Emancipation Day - April 2 - when Trump's announcement of sweeping duties raised fears that an escalating trade war would lead to higher inflation and recession in the world's largest economy.
"The period of sharp market declines should have been used to buy on the drawdown, but many, by contrast, became structurally pessimistic and missed out on one of the biggest opportunities of the past five years. I would call this the biggest mistake investors have made this year," Lee said.
Lee also noted that investors have become "overly sensitive" to fears of rising duty-induced inflation and often "overreact" in their reactions, while the Federal Reserve sees it as temporary - allowing markets to ignore short-term risks of accelerating inflation.
"Rising inflation doesn't mean the Fed has to tighten policy in the long run," Lee said, adding that this misconception has kept many investors from being optimistic, even though the Fed resumed cutting interest rates in September.
Inflation in the US remains above the Fed's target level: in September, consumer prices rose to 3% in annualized terms after 2.9% in August. Despite the fact that this is the highest inflation since January, economists expected prices to rise even more strongly - by 3.1%.
U.S. stocks showed a surprisingly quick and powerful recovery even after the collapse that followed April 2, when the major indexes temporarily fell to near bear-market levels. By the end of Ma, all three key indexes had recovered losses after Trump suspended increased duties on most countries for 90 days, a move that was a reversal in the trade war and helped markets recover, MarketWatch writes. Since the April 8 lows, the S&P 500 Index is up 35% through early November, the Dow Jones Industrial Average has added 25% and the Nasdaq Composite has jumped more than 50%, according to FactSet data.
High volatility makes buying stocks - or choosing when to enter after a dip - a challenge for many investors, the publication notes. But those who took advantage of the drawdowns have been rewarded: The market's rapid recovery has once again yielded the biggest profits for those who maintained their positions and didn't panic, MarketWatch adds.
This article was AI-translated and verified by a human editor
