Speculation vs. Strategy: What’s Fueling the 2025 Stock Market?

As I write this note, the S&P 500 is up +14.37% year-to-date.¹

The positive return is not a surprise.  After all, the U.S. stock market goes up about 70% of the time annually over the past 100 years.

It should come as no surprise that we have benefitted from our long-held belief that the most efficient and effortless way to build wealth is by investing in a low-cost diversified portfolio of enduring companies that have weathered the ups and downs of the market.

We have been rewarded for this belief.

The concerning trend?

1. As of September 30, 2025, Nasdaq companies without revenue are up 34% year-to-date
2. Profitable Nasdaq companies are up only 7% during this same period²
3. The S&P 493 (the S&P 500® minus the Magnificent 7) is up 8%

The concerning trend (summary) – There appears to be an overweight speculation on the future of tech companies and the magnificent 7 are carrying much of the weight in the S&P 500®

Here’s what we believe at Know My Plan: First and foremost, steward our client’s assets to the best of our ability.

In doing so, we invest in companies that are not only profitable, but preferably highly profitable.

In the short term, we may underperform most broad-based indexes.

However, we believe strongly in the long-term benefits of investing in enduring companies that have weathered the ups and downs of the market.

We believe there is stark difference in investing in companies with historical revenue growth versus speculating on the next big thing.

(Note: If you’re familiar with our content, you know that we have no problem if you want to speculate with a responsible portion of your assets in pre-revenue companies).

Our belief is that your serious long-term investment money should be allocated to more enduring companies.

Important Investing Mindsets: We believe markets cannot be timed nor consistently forecast. You earn the long-term return by being invested in good times and bad times.

We are optimistic by nature and believe that the companies we own will continue to innovate and solve whatever problems we face next.

We believe that by owning companies aligned with our best interests will continue to steward their capital towards profitable endeavors thereby benefitting us all.

What’s Next?

By no means is any of this a prediction of a collapse, downturn, or market drop.

However, simply using history as our guide, we know the drops happen.  Often when we least expect them and for a reason that nobody could’ve predicted.

Volatility is also normal. Fear will emerge.  People will get loud: “This time it’s different.”

I calmly remind our Know My Plan Financial Planning clients; we have already prepared for any of this:

• All the money you need from your portfolio over the next 5 years is not in the stock market
• You have a robust cash emergency fund
• If you have equity in your home, you’ve been encouraged to get a home equity line of credit
• You have appropriate insurance coverages in place

Whatever the next apocalypse de jour is, it too shall pass.

I’ll repeat my message from 2024 merely for effect: “Don’t get distracted.  Hold tight to your financial plan.”

Stay disciplined.  Work the plan.

If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.

–Nic

¹As of November 7, 2025.

²Source: Shroders