- Fundstrat’s Tom Lee says the next 18 to 24 months could deliver historic market gains
- Lee believes equities and crypto have already absorbed most bear-market damage
- Retail investors, Fed changes, and earnings growth could fuel the next major rally
Fundstrat’s Tom Lee believes markets are approaching what could become one of the strongest investing periods in decades once current volatility settles down. According to Lee, the next 18 to 24 months may deliver some of the best returns investors have ever experienced, driven by improving liquidity conditions, stronger earnings, and renewed retail participation.
Lee acknowledged that markets could remain unstable in the near term as investors react to the arrival of a new Federal Reserve chair. Still, he argues that much of the underlying bear-market damage has already quietly taken place beneath the surface.
Why Lee Thinks the Worst Is Already Over
According to Lee, roughly half of the equity market and nearly the entire crypto sector already went through a hidden bear phase over the past year. He pointed to sharp declines in software stocks and digital assets caused largely by liquidity tightening and broader macro pressure.
He also noted that short interest levels now resemble conditions normally seen during the middle stages of bear markets rather than near cycle highs. In his view, pessimism arrived earlier than expected, meaning markets may have already absorbed most of the downside damage.
Retail Investors Could Drive the Next Move
Lee believes retail investors are slowly beginning to move cash back into markets after staying defensive through recent volatility. If momentum continues improving, he expects retail traders to eventually chase the rally higher, adding another layer of buying pressure to both stocks and crypto.
He also sees geopolitical instability strengthening the U.S. economy relative to global competitors by exposing weaknesses in international supply chains. Combined with earnings growth and multiple expansion, Lee believes the setup could support a powerful multi-year rally if conditions stabilize.
Markets Are Watching Closely
Tom Lee has made aggressive market calls before, and not all of them landed perfectly. Still, his bullish outlook continues attracting attention because many of his previous long-term market predictions have ultimately played out correctly despite heavy skepticism at the time.
For now, investors remain focused on inflation, Federal Reserve policy, and broader economic conditions. But if Lee’s thesis proves even partially correct, markets may be much closer to the next major expansion phase than many currently believe.
