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Stocks Have Had a Big 2025. Should You Buy Into the 'Most Wonderful Time' of the Year?

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  Published in Stocks and Investing on Friday, October 3rd 2025 at 4:56 GMT by Investopedia
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Stocks Have Had a Big 2025—Should You Buy Into the Most Wonderful Time of the Year?

The first half of 2025 has proven to be a surprisingly buoyant period for equities. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite have all posted gains that outpace the market’s long‑term average, and analysts are already discussing a possible “best buying window” as the year draws to a close. But what does that mean for the average investor? A recent article on MSN Money takes a deep dive into the data, the seasonal patterns that could still be at play, and the risks that might keep some buyers cautious.

1. A Record‑Breaking Rally So Far

According to the MSN piece, the S&P 500 has climbed roughly 7.8 % in the first nine months of 2025, a sharp uptick from the roughly 2 % average annual return of the past decade. The Dow has surged more than 6 %, while the Nasdaq has posted a 9 % increase, propelled largely by strong performance in tech stocks such as Apple, Microsoft and Nvidia.

A chart in the article shows the tech sector’s 12‑month rolling return exceeding 25 %, a figure that would be difficult to ignore. Analysts attribute this surge to a combination of robust corporate earnings, lower-than‑expected interest rates and the continued acceleration of digital transformation in the private and public sectors.

2. Seasonality: The “Wonderful Time” of the Year

The article explains that the market has a long‑standing tradition of rallying in the final quarter, a phenomenon tied to the holiday season, corporate earnings, and the end‑of‑year tax‑loss harvesting cycle. In 2024, for instance, the S&P 500 posted a 4.5 % jump between September and December, while the Nasdaq recorded a 6.3 % rise.

This December‑to‑January “seasonal bump” has led some investors to adopt a “buy the dip” mindset. However, the MSN article notes that the current year’s rally has already stretched many stocks to near‑record valuations, which could temper the magnitude of any future rally.

“The holiday season rally is still a thing,” writes analyst Jane McClure. “But you’re looking at higher price‑to‑earnings multiples and a tighter macro environment.”

3. Inflation, Fed Policy, and Global Risk

A key warning in the MSN article is that the macro backdrop is not as benign as the charts suggest. Inflation remains stubbornly above the Fed’s 2 % target, and the central bank is expected to keep the federal funds rate near 4.75 % through at least the second quarter of 2026. In addition, geopolitical tensions in Eastern Europe, supply‑chain constraints, and the risk of a sudden spike in commodity prices are all potential headwinds.

The article links to a recent Federal Reserve statement that hints at “no immediate need for aggressive tightening,” but the tone also suggests that policy could change quickly if inflationary pressure increases. It also cites a Bloomberg‑style research report on the “risk of a soft landing,” which notes that a sharp slowdown in the tech sector could ripple through the broader market.

4. Strategic Options for the Average Investor

When it comes to deciding whether to buy now, the MSN article offers a balanced set of strategies:

The article recommends that investors assess their own risk tolerance and time horizon. Those with a longer horizon (10 + years) can afford to ride out volatility and benefit from compounding, while short‑term investors might consider a more cautious approach.

5. Bottom Line: A “Wonderful Time” with Caution

The takeaway from the MSN Money article is that while 2025 has seen a strong run in the equity markets, the “wonderful time” of the year may still be a few months away. The combination of high valuations, inflationary concerns, and the possibility of Fed tightening means that the market could experience a correction before a final rally.

Investors are encouraged to stay diversified, consider dollar‑cost averaging to mitigate risk, and remain mindful of macroeconomic indicators. By combining the momentum of a strong first half with disciplined portfolio management, investors can position themselves to benefit from the best that the end‑of‑year rally might offer—while protecting themselves against the inevitable bumps that follow.

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