With New Risks Surfacing, How Should Investors Position Portfolios in 2025?
Despite still stubborn inflation, a brief growth scare, less than expected interest rate cuts, and a pullback in December, US equities were up notably in 2024 on the back of a strong economy, accelerating earnings growth, US election results, and AI/mega-cap-related strength. The S&P 500 Index gained 25% for the year and recorded 57 all-time highs in 2024, the fifth highest of any year in history. US growth (+36.0%) was among the best performers, followed by US large-caps (+24.9%) and US mid-caps (+13.9%). Bonds were mostly up as high-yield credits increased 7.7%, investment grade corporates gained 2.6%, and Treasury inflation-protected notes rose 2.3%. Commodities fared well as both gold and silver were up over 20% (+26.7% and +20.9%, respectively), crude oil increased 13.4%, and broad-based commodities gained 5.5%.