Investors Need Big-Picture View of Market in 2025, Beyond
Posted on February 12, 2025
The stock market had a stellar year in 2023, followed by another great year in 2024.
What will 2025 bring? Opinions of financial experts vary, but if January’s performance was any indication, we’ll have good days, bad days and hopefully an ample supply of calmer days. That is precisely why top analysts do not read too much into a day, a week or even a month.
View the 2025 Market Outlook recording.
“Regardless of what happens in 2025, we’re always looking three to five years out, or more, when working with a portfolio,” said Chris Morgan, CFA, CFP®, CAP, a senior vice president and senior portfolio manager for The Sanibel Captiva Trust Company.
Morgan was one of three featured presenters at the Trust Company’s 2025 Economic Outlook, an annual review of the prior year’s market performance and preview of issues that will impact the nation’s economy. Joining Morgan at the Jan. 28 event, which was held at Shell Point’s Tribby Arts Center in Fort Myers, were Kristian R. Jhamb, MBA, CFA, Chief Investment Officer, Senior Portfolio Manager at The Sanibel Captiva Trust Company and Jodi Schwartzel, vice president and portfolio manager at the Trust Company.
Morgan noted the S&P 500, an index tracking performance of the largest publicly traded companies in the U.S., gained an impressive 26.3% in 2023. Many pundits believed a correction was due in 2024; instead, the S&P 500 grew again, this time by 25.0%.
Jhamb spoke to the Trust Company’s underlying optimism. “We have long adhered to the notion of U.S. exceptionalism, on many fronts. This has been to our clients’ significant benefit as U.S. markets, driven by the ‘exceptional’ tech companies that reside here, have outperformed markets around the world.” He noted that the top seven U.S. technology firms currently have a market value larger than that of all of Europe.
On the other side of the ledger, Jhamb conceded that debt and spending levels in Washington could upend the bullish narrative if the current trajectory doesn’t moderate. He also stressed that the market’s exuberance over a perceived pro-business administration will need to be tempered against the political realities in Congress.
Schwartzel offered a historical view of the S&P 500’s largest stocks in 1990, 2000, 2010 and 2024. None of the top companies on the original list are still there. Instead, the 2024 list was led by Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta, Eli Lilly, Broadcom, Tesla and JP Morgan Chase—several of which didn’t even exist in 1990. The decade-by-decade snapshots offer proof that a strong investment today isn’t necessarily a solid investment down the road. Schwartzel pointed to one-time blue chips such as Eastman Kodak, Blockbuster and Kmart that also seemed invincible.
“We only hear these names now when we are reminiscing,” she said. “They have come, and they have gone. But new opportunities, thank goodness, are everywhere.”
Schwartzel noted that innovators and entrepreneurs are filing patent applications in waves for new products and processes, including robots, drones, self-driving cars, quantum computing, blockchain, gene editing, personalized medicine, extended reality, artificial intelligence, portable nuclear reactors, and space travel.
The Trust Company recommends a disciplined investment approach that focuses less on short-term market noise and more on long-range goals that should dictate asset allocation and investment choices. We rely on our independent, in-house research to produce diversified, transparent, and liquid investment portfolios.
Every portfolio design should consist of these key elements:
– Understanding our client’s unique goals and constraints.
– Goals and constraints then dictate asset allocation and investment selection.
– Results should align with investment goals over the long term.
If you would like to discuss market conditions and portfolio strategy for your portfolio, we invite you to contact us at www.sancaptrustco.com
Craig Holston
Senior Portfolio Manager
LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. Not FDIC Insured | No Guarantee | May Lose Value
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