The Armstrong Report: Winter 2025 Firm Update
Reginald A.T. Armstrong • The Armstrong Report
Happy New Year! Wow, it’s 2025. We are already a quarter through the 21st Century.
ECONOMY
The economy continues to grow at around 3% as of my writing this on December 16th. The only major weak spot is manufacturing. There are also some revisions to employment gains that indicate employment strength over the past 12 months was overstated. Still, the services part of the economy and retail sales remain strong. The election of Donald Trump likely means the current tax policy, with some modifications, will continue. That, and a more pro-growth regulatory environment, should be positive for the economy.
MARKETS
Global markets have had a very good year, with US large stocks in the lead again. The S&P 500 as of this writing is up 29%, the Nasdaq is up 34%, midcaps are up 19%, and small caps are up 13% (they were actually negative for the year until July). Developed foreign stocks, especially in Europe, lost some gains as the Ukraine-Russia conflict escalated in October-November. They are up 8%, while emerging markets are up almost 10%. Bonds, as measured by the Aggregate Bond Index are up 2%, but yields over 3%. Cash yields have come down as the Federal Reserve has cut rates, but still yield above 4% currently. Finally, gold and crypto have had a banner year, with gold up 28%.
So, what’s next? Since we know that past performance is no guarantee of future results, we will review many portfolios to rebalance back to target. This means if a client is supposed to have 60% in stock but now has 65%, we will rebalance to the target. US stocks remain overvalued, but until there is a recession looming or some major geopolitical event, they can still advance. Bonds are a good value with many bond portfolios we manage yielding 5-6%.
THE FIRM
For the second year in a row, our firm was selected by Post and Courier readers as the Best Financial Planner in Florence. We appreciate your trust in your wealth manager and in our firm. We may not be perfect, but we work every day to be the best. Thank you.
Have a fantastic 2025!