The outlook for the Nasdaq index in 2025 is generally positive, but there are differing opinions among experts. In particular, the effects of President Trump’s inauguration and Elon Musk’s Government Efficiency Department are difficult to predict.
If Elon Musk's Government Efficiency Department successfully implements efficient reforms, the United States may become stronger as a nation, but citizens may become poorer. Income inequality could widen, and the country might lose its long-term growth momentum, which could necessitate preparations for prolonged stagnation.
I believe that businesspeople should not engage in politics because their approaches are fundamentally different. For example, in a company like X, many people work there, but if employees are laid off for the sake of efficiency, it might benefit the company but leave the employees suddenly unemployed and unhappy.
Similarly, if the Government Efficiency Department reduces budgets for "unnecessary" departments and proceeds with layoffs to maximize civil service efficiency, this might be beneficial for the government in the short term. However, the laid-off individuals would still need to be supported by the government. If they suddenly lose their jobs and are unlucky in finding new ones, they could face bankruptcy. In extreme cases, their children may grow up not as future scientists but as individuals addicted to drugs or involved in gangs, negatively impacting society.
To support these individuals, the government may end up incurring even higher costs.
Of course, it’s highly likely that Elon Musk is aware of this as well—he’s a smart man. He is someone who revels in the short-term outcomes of his actions, but before the long-term side effects become visible, he will resign and return to his original business ventures. After all, he possesses the qualities of a great agitator and a cherry-picker. It’s hard to imagine him passively responding to the future challenges facing America, especially since U.S. debt is already accelerating toward the sky as if running on rails with no brakes. To achieve visible results, strong short-term brakes will inevitably be applied. While some might sound alarms regarding such measures in the short term, the mid- to long-term outlook will likely be painted in rosy hues by many.
However, we must remember this parable:
The world was plunged into an endless vortex of war. Beneath desolate lands and uneasy skies, there was but one safe place: a fortress with a powerful army. Desperate people all looked to the fortress, and the wealthy, in particular, flocked to it, bringing their possessions with them.
As more rich people entered the fortress, the poor, who had been eking out a living inside, were gradually pushed out. At first, they settled near the walls, but over time, they were driven further and further away, until they could no longer commute to the fortress within a day. Eventually, they gave up on working for the fortress and chose instead to leave for other castles or dangerous lands.
Meanwhile, inside the fortress, things grew ever more splendid. The lights that illuminated the night sky and the music that echoed throughout the fortress grew more vibrant by the day. It seemed as though the fortress was an eternal, shining city where night would never come, and the rumors spread far and wide.
But change was brewing within the fortress, too. Its once-powerful army was no longer strong. Soldiers began demanding higher wages from the wealthy, but even those wages proved woefully insufficient for survival inside the fortress. Eventually, the soldiers abandoned their posts, either giving up on fighting for the fortress or leaving in search of a better life.
With the army gone, the wealthy began to realize that the shadows of the war they feared most would soon cross the fortress gates.
And then, one night, the lights of the fortress suddenly went out. No more music could be heard. The once-glorious fortress fell silent, and the fortress—once filled with the wealthy—became an empty shell, left with no one to protect it.
I firmly believe that the concentration phenomenon in the Nasdaq will continue into 2025, and I think the United States will remain strong.
In the short term, there may be volatility due to friction with China, but the U.S. goal is to keep China under its influence, much like Japan, rather than completely destroy it and disrupt the global supply chain. Since it’s difficult to subdue China with overwhelming force as was done with Japan, a prolonged strategy of “taming” China will continue, though it won’t be easy. Russia has already demonstrated that a country with a large population like China can rely on its domestic market to remain resilient.
Personally, I believe that a strategy of gradually buying into the Chinese stock market could be a viable approach, provided you can accurately predict the bottom as much as possible. Given the current challenges, if China implements financial policies that are more open to foreign investors, that timing could also be quite favorable.