Expect positive gains in the market over the next few years: Defiance ETFs' Sylvia Jablonski

Joining us right now on the markets is Sylvia Jablonski, Defiance ETF CEO, CIO and co-founder. Sylvia, welcome. Let's talk a little bit about what we've seen in the markets. We'll talk about the Fed in a moment, but let's just talk about what we're facing as we are in this last trading month of the year. It's been a great year so far with the S&P 500 at better than 25%. That comes on the back of another great year of the year before. So what are you expecting for 2025? Good morning, Becky. Well, I think we've had a stellar year. I think 27% is a blowout number for the S&P 500. Shows us that the economy is strong. We have a strong consumer. We have strong manufacturing data. Jobs are steady. 7 trillion of sidelines that can come into the market next year I think bodes well for performance. And so we've had this 25% plus number about eight times since the 1950s. I don't think we're going to have quite that next year, but I do think that earnings and corporate growth plus a president coming in that is a fan of deregulation and tax cuts and things like this, I think that can propel the market forward and we'll have positive gains for a couple of years ahead of us at least. You also point out that there's a whole lot of cash on the sidelines. You think that money is going to be coming and working its way into the markets? I think it is. The 5% rates that you can get from different money market funds and treasuries and cash-like instruments, those are going to be falling as we see rate cuts come down for the next year or so. And when you see 27% on the S&P 500, it's really hard to think that the best place for your money to be is in cash on the sidelines. Equities have just been completely robust. The market has been broadening. There's lots of opportunities out there, whether it's just straight S&P 500, whether it's the quantum plays, whether it's the XMAC trades, energy. There's a different Bitcoin, crypto, a lot of different places to put your money to work that yield more than 5% right now. And where would you be looking specifically? Do you continue with the AI plays? Do you continue with technology? Are you looking to broaden out? I like the AI trade. I think I start to filter into the AI electrification, that power trade. If you look at companies like Vishra, for example, up over 300% year to date, I think that we're going to need a lot of power to make this AI machine learning play a reality. That also trickles into quantum. If you look at Cuba, IonQ, some of these names, the first one up 580%, IonQ, well over 100%. There's expected to be $450 billion of economic value in quantum computing by 2040. I think that's the next step of AI, which is basically supercomputing to process all that data quickly. That's a place that I'm looking. And then just broadening out from the S&P 500. I love my MAG-7. I have them. I buy them individually on the dips. But broad-based exposure, I might look at XMAG because then I get exposure to the names like the Vistras and the Broadcoms and the Eli Lilies and such that have also been thriving within this 493 of the S&P 500. So all of the things you're talking about aren't really impacted by what the Fed does. Are you assuming that the Fed is going to continue on this rate-cutting path, or do you worry that there could be a point where they say, forget it, we've got to hold off because we're worried about inflation again? So it's a tricky kind of balance, right, because we want the Fed to cut, but we don't want the Fed to have to cut so much because that means that we're in trouble, right, and the economy is slowing. And so I'm perfectly fine with the idea that the Fed does another cut or doesn't do another cut and kind of lags into this based on data. Corporate earnings are better than expected the economy is strong. So I think we're in a really good spot right now. If the Fed had to just kind of like, you know, fire a fire sale, cut rates, that's not a great indicator and it won't be as good for stocks as people realize. So I think this kind of like slow cutting coupled with a strong economic background, I mean, this is kind of the sweet spot for markets and equities. Sylvia, we haven't talked about it yet this morning, but the French government is facing a vote of no confidence. If the prime minister is removed, if they can't come up with a budget, we're already watching bond yields spike there and borrowing costs go up pretty sharply. Do you worry that this is a contagion factor? Is it something that doesn't really enter into your focus? It won't have an impact on what's happening in the United States? How are you looking at this just as an investor overall? Yeah, I mean, as an investor, I think I'll look, you know, I kind of look at this acutely as it relates to European markets, European equities. I don't think it'll so much impact the U.S. But I think that's a great point to bring up. You know, you have this overarching theme of geopolitics and what's going on in the world. And I think that, you know, over the last couple of years, there have been some very serious things happening, whether it's what we see happening in Israel, Russia, Ukraine, and how this, you know, how this plays out over years to come. So we have a president that's going to be, you know, kind of tough on both of those issues. And I think things like that can impact markets just because, you know, the U.S. is kind of strong reach and strong arm there. But in terms of, you know, what's happening in France, and, you know, I think that won't affect markets. China's another one that we'll have to keep our eyes on with tariffs. You know, I think Joe said it yesterday. Is this the art of the deal? Or are we going to kind of, you know, crush trade? I think those are the things that we have to look at. Internally, for just this month, do you have any specific things you'd be looking at for this last month of the trading year? I know you mentioned, I think, Amazon on e-commerce. That's something that you really focus on for the month of December? Yeah, I have Amazon for e-commerce. I've just been, boy, I've been scooping up these quantum stocks. You know, they've been flying. I've been looking at crypto, right? It's just touched right near that 100,000 level. It's fallen down to 95,000. Again, MicroStrategy is kind of my vehicle for playing that. And I think that there have been some good short-term buy on the dip opportunities there. But overall, I'm a long-term investor, right? So I dollar cost average. I hold this stuff like quantum AI, that are going to play out for the next five to 10 years. I buy them on dips and hold them forever and try not to get too cute because it's hard to beat the markets.