Market Perspectives Q2 2025

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Concentrated Stock

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Investments

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by Kieran Osborne, MBus, CFA®, Chief Investment Officer

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May 19, 2025

Insights from Q2 2025

Uncertainty associated with trade policy has dominated the start of the year, with stock markets moving lower, then higher, primarily a function of tariff developments. While stocks have rallied off lows after the tail risk of a U.S.-China trade embargo appears to have been removed, uncertainty remains. We have also witnessed significant divergence in performance across asset classes year-to-date, underscoring the importance of portfolio diversification and disciplined rebalancing. After falling earlier in the year, bond yields have since trended higher, with heightened inflation expectations and an improving economic outlook.

The outlook for the economy remains uncertain, though based on recent developments, we expect growth to be revised marginally higher. While the chances of a recession are elevated, it is not currently our base case, and the outlook for growth has recently improved following more favorable U.S.-China trade developments.

Inflation expectations are elevated and are anticipated to remain above the Fed’s long-term target of 2% over the near term. Given the continued uncertainty, the Fed will likely remain in “wait and see” mode, and we expect a higher-for-longer interest rate environment, albeit with a downward bias.

We are positive about the long-term outlook for stocks, particularly given our base case that a recession will be avoided. We do, however, anticipate ongoing volatility given the uncertain backdrop. We believe taking a long-term view, maintaining broad diversification, remaining disciplined with investment decision-making, and staying fully invested is critical. Bond yields are currently attractive, with many of our preferred bond funds yielding mid- to high-single digits. Moving forward, we believe alternative strategies may offer attractive risk-adjusted return potential.

To learn more, please download our Quarterly Market Perspectives.

Managing Your Investments at Mission Wealth

Encouraging progress on trade relations has helped ease some uncertainty, and while inflation and global dynamics remain in focus, these conditions also create opportunities for well-diversified portfolios. We remain confident that investors can successfully navigate short-term volatility and stay on track toward their financial goals with a steady, long-term approach and thoughtful guidance. As we progress through 2025, maintaining a globally diversified, tax-efficient portfolio aligned with your long-term goals remains essential. At Mission Wealth, we build portfolios tailored to your financial plan and designed to stand the test of time.

To explore how we can support your financial journey, connect with our team today.

Customized Investment Management Solutions

At Mission Wealth, we develop customized, globally diversified, tax-efficient portfolios tailored to your financial plan and built to stand the test of time. Contact us below for a free portfolio review.

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Investment Advice Fit For Your Needs

At Mission Wealth, we are deeply rooted in an evidence-based investment strategy built on decades of Nobel Prize-winning research. We ignore the media noise and Wall Street hype, relying instead on a long-term approach and proven principles that reward investors over time. For more information on Mission Wealth's investment strategies, please visit missionwealth.com.

To meet with a Mission Wealth financial advisor, please contact us online today or call us at (805) 882-2360.

Mission Wealth is a Registered Investment Advisor. This commentary reflects the personal opinions, viewpoints, and analyses of the Mission Wealth employees providing such comments. It should not be regarded as a description of advisory services provided by Mission Wealth or performance returns of any Mission Wealth client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Mission Wealth manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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