In this quarterly market update, Wes Read is joined by Chief Investment Officer Brandon Hobson and investment committee member Paul Lipcius to unpack the swirling forces shaping the markets in mid-2025. From geopolitical tensions and legislative changes to the explosive innovation in AI, the team explores why this year has been anything but predictable.

They discuss the surprising resilience of markets, the impact of currency fluctuations, and why disciplined diversification across small caps, value stocks, and international equities is paying off for investors. Whether you’re curious about why international stocks are leading or how Practice CFO strategically tilts portfolios to manage risk and seize opportunity, this episode provides clarity and perspective for investors navigating uncertain terrain.

Key Points

• Better Than Expected Performance: Despite early-year uncertainty, markets have performed more strongly than most anticipated.
• Volatility Remains High: After a volatile start, recent months have stabilized, though many unknowns persist.
• International Equity Surge: International developed and emerging markets are outperforming U.S. equities, buoyed in part by currency effects.
• Small Caps Poised for Upside: With expected Fed rate cuts, small cap stocks are positioned for potential outperformance.
• Value Over Growth: In this phase of the cycle, portfolios are tilted toward high-quality value stocks to manage risk.
• Disciplined Diversification: Practice CFO avoids market timing and instead uses tactical tilts to align with long-term objectives.
• Currency Dynamics Matter: Dollar weakness has amplified international returns, demonstrating the importance of currency diversification.
• Recency Bias Caution: The temptation to overweight recent winners is strong, but buy-low-sell-high discipline remains critical.
• Long-Term Focus: While tech-led growth has dominated for a decade, historical trends favor value and small caps over time.

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