As we look ahead to 2025, we remain cautiously optimistic. Cautious because we know that no market environment is ever permanent, and that change is always potentially around the corner. Optimistic because we recognize constructive long-term technology trends are in place. Plus, potential tax policy and deregulation efforts in 2025 could provide some semblance of a tailwind — particularly from an economic perspective. While growth asset returns are not expected to be as robust as 2024, 2025’s investment environment should prove to be favorable for investors.

To better ensure optimal outcomes for investors, our Strategic & Tactical Asset Allocation Committee (STAAC) employs a rigorous and systematic approach to investing. Leveraging proprietary quantitative modeling, our team seeks to identify potential risks and opportunities across capital markets. For 2025, new fiscal and regulatory policies will need to be digested, and relatively rich valuations may get tested. This means equity markets probably won’t be as one-way as they have been. For the time being, this backdrop favors a constructive, but also a conservative and balanced approach to tactical stock and bond allocations.

LPL Research is committed to supporting our advisors, our institutions, and their clients throughout every market cycle. We truly value our partnerships and will always strive to deliver the highest level of guidance and support. We remain incredibly grateful for the confidence bestowed upon us and wish you a very prosperous 2025!

LPL Research’s 2025 Outlook: Pragmatic Optimism, offers fresh insights into the economic and market landscape, along with their potential impact on investment portfolios.