Outlook 2025

Updated: 29th December, 2024

Markets remain in late-stage cycle where global economic paths are diverging. A changing policy mix is likely to led to a more volatile environment for risk assets. We favour U.S. equities over bonds and believe cash, foundational and antifragile assets can play an increased role in portfolios.

As we approach the close of 2024, markets are ending the year on a resilient, if somewhat turbulent, note. The cap-weighted S&P 500 has risen +25%, while the equal-weight S&P 500 gained +12%, Russell Value is up +13%, and U.S. small caps returned +11%. In fixed income, the U.S. 2-year yield remains steady at 4.25%, the U.S. 10-year yield increased by 60 basis points (bps) to 4.53% and the U.S. Home Mortgage Rate increased by 56 bps to finish 7.28%. Notably, despite a 100-bps rate cut by the Federal Reserve, both long-term U.S. Treasury rates and home mortgage rates moved higher—an unusual dynamic that reflects the complexities of balancing the market expectations of growth versus inflation.

Yet, 2024 will likely be remembered less for market performance and more for a defining “changing of the guard.” Milestone elections across major economies—including the U.S., United Kingdom, France, South Korea, and Japan—have set the stage for a new era of policy direction, governance, and economic recalibration.

Led by the United States, policy redirection is squarely focused on reducing government spending, addressing immigration, and recalibrating international trade policies. These initiatives reflect a broader generational realignment in governance, signaling a departure from the past….

Continue Reading: 2025 Investment Outlook – Changing of the Guard