Center For Investment Excellence 2025 Asset Allocation Draft
18 snips
Jan 17, 2025 David Lebowitz chats with Jared Gross, Head of Institutional Portfolio Strategy, about the 2025 Asset Allocation Draft. They dive into macroeconomic trends, consumer behavior, and labor market stability. The conversation spotlights risk assets and the need for an active investment approach. They emphasize the shift in the U.S. equity market, with mid-cap stocks gaining attention, and underscore the value of core real assets like real estate. A bold recommendation for investing in Japanese equities also adds a twist to their strategic insights.
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US Economy Outlook
- The US economy is expected to remain strong in 2025, driven by consumer spending and potential capital spending increases.
- The labor market is healthy, and real incomes are growing as inflation slowly declines.
Portfolio Strategy
- Investors should seek strategies sensitive to nominal growth and consumer income, like equities and certain real estate/infrastructure.
- Consider global diversification due to extreme U.S. market concentration.
Equity Market Outlook
- The beta trade in U.S. equities is over; focus on alpha.
- Consider sectors like financials, which may benefit from deregulation, and domestic manufacturers, potentially boosted by tax cuts.