2025 is shaping up to be a transformative year for markets, with the U.S. presidential election behind us and President-elect Donald Trump’s policies expected to set the tone for economic and sectoral dynamics. The outlook remains cautiously optimistic, but investors must navigate a landscape rife with opportunities and risks. Here we offer a concise breakdown of our market outlook for the new year; the full report from Grey Ledge Advisors is attached at the end of this article.
Economic and Sectoral Highlights
Energy Sector: Traditional energy companies will thrive under deregulation, boosting profitability in oil and gas. However, renewable energy projects may face challenges with reduced infrastructure funding.
Financial Sector: Deregulation and a steeper yield curve will favor banks, driving improved net interest margins. The deal-making environment also looks ripe, but systemic risks persist due to reduced oversight.
Industrial and Manufacturing: With proposed corporate tax cuts to 15% and tariff protections, domestic manufacturers will benefit. However, increased input costs from tariffs could disrupt companies reliant on global supply chains.
Small Caps: Small-cap companies stand to gain disproportionately from tariff protections and lower taxes while trading at a significant valuation discount to large caps.
Japan’s Market Opportunities: A unique investment destination, Japan combines stable inflation, corporate governance reforms, and innovative sectors like semiconductors, robotics, and advanced materials to attract global investors.
Key Themes in Technology
AI Revolution: Advances in AI are reshaping industries, driving efficiency and innovation. Companies investing in AI are expected to gain first-mover advantages.
Cybersecurity Challenges: The rise of AI-driven cyberattacks demands significant investment in robust cybersecurity measures, creating opportunities in this critical sector.
Macroeconomic Landscape
Federal Reserve: Persistent inflation, hovering at 3.5%, complicates the Fed’s balancing act between rate cuts and economic growth.
Trade Policies: Aggressive tariffs may bolster domestic industries but could stoke inflation and disrupt global trade.
Geopolitical Risks: Escalating regional conflicts and shifting global alliances could disrupt capital markets in unexpected ways. While trade tensions dominate headlines, geopolitical unpredictability may create ripple effects on currency stability, commodity pricing, and cross-border investments.
Key Risks to Watch
Inflation and Unemployment: Persistent inflation and rising unemployment (projected at 4.5%) signal an economic slowdown.
Debt Refinancing: Higher refinancing costs could drive increased default risks for speculative-grade firms.
Market Valuations: Elevated equity valuations heighten correction risks if earnings fall short.
Household Debt: Increasing debt levels may weigh on consumer spending, dampening growth.
Closing Thoughts
The year 2025 presents a dual narrative of opportunities and challenges. Sectors like technology, energy, and small caps offer significant upside potential. However, investors must remain vigilant against macroeconomic risks and geopolitical shocks. With careful positioning and a focus on resilience, portfolios can be aligned to capitalize on emerging trends while mitigating downside risks.
To read the complete Market Outlook Report, please download the report here: Market Outlook 2025
Many older adults have high levels of regret about their finances, according to responses to a 2020 survey of Americans over age 50 conducted by the University of Michigan Health and Retirement Study.
The survey found that nearly 60% of participants regretted not saving more for retirement. Forty percent regretted not buying long-term care insurance, 37% regretted not working longer, and 23% regretted taking Social Security too early.
Financial regrets may be common, but they don’t have to be inevitable. And even if you have regrets about how you prepared for retirement, these errors don’t have to be permanent. There are options for course correction, even after you’ve stopped working.
Here are four tips to help you avoid or mitigate financial mistakes in retirement.
1. Plan for long-term care expenses
One mistake that clients may make after retirement is not considering long-term care planning,
including the potential need for nursing home or assisted living expenses. These costs can deplete your assets and put a strain on your loved ones.
Someone turning 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years, according to the U.S. Administration on Aging. The average person requires care for three years.
You may want to explore options for long-term care insurance and create a comprehensive estate plan that addresses the potential costs of long-term care.
2. Account for inflation
Nearly two-thirds of retirees said inflation and the rising cost of living was the “biggest financial shock” in retirement, according to surveys conducted from January to March 2023 by Edward Jones and The Harris Poll.
Respondents cited inflation as a shock more often than the combined total of the next three top
responses — unexpected medical or dental expenses (22%), major home expenses or repairs (20%), and significant declines in the value of investments (19%).
If your earlier retirement planning didn’t account for high inflation, it might be time to re-examine your retirement finances.
3. Keep managing your investments
Whether it’s to deal with inflation or for any other reason, you might want to revise your investment and/or withdrawal strategies to help your money last in retirement. You should have a retirement income plan in place that matches your current lifestyle.
4. Prepare for surprises
Even with a good retirement income plan, your finances need to be ready to deal with surprises. Unplanned expenses such as a roof replacement or a large unexpected medical bill could cause problems.
Some of these problems might be harder to deal with now than in the past. Higher inflation means those unexpected expenses might cost more than before, while you’re also spending more on the day-to-day cost of living.
Plan to put some of your retirement income aside for unforeseen costs. An emergency fund of three to six months is generally sufficient to cover or defray these expenses.