“Go ahead, you can get excited about the future. The past won’t mind.” — Hillary DePiano

The initial stock market optimism following the U.S. presidential election has quickly dissipated, overshadowed by the realization that there are no concrete economic policies set forth by the incoming administration as global events continue to fuel uncertainty and market volatility, leaving investors on edge. From shifting political landscapes to ongoing international crises, we are witnessing a time of profound global disruption. However, it’s important to remember disruption can be fertile ground for opportunity.

In the U.S., the political transition from Democrat to Republican control has stirred tensions, while across the Atlantic, France’s snap elections have led to a government deadlock. In Germany, the collapse of the current government, with elections scheduled for February, further adds to the uncertainty. The challenges are worldwide: China’s property market struggles persist, with rising debt and devaluation concerns. The war in Ukraine rages on, soon entering its third year, and the Middle East remains volatile, with the collapse of the Syrian government and ongoing threats from Houthi militants impacting vital trade routes, such as the Suez Canal. Despite these challenges, we hold out hope that 2025 will bring some resolution to many of these pressing issues.

Over the past 4 months, the Federal Reserve has reduced short-term interest rates by one full percentage point, signaling an apparent victory over inflation. However, the landscape remains complex. Long-term interest rates have begun to rise, which pushed bonds into negative territory for the third time in four years. At the same time, inflation is creeping upward again, threatening future rate cuts. On a more positive note, your cash invested in money market funds continues to offer solid returns, with yields exceeding 4%.

Amidst the global challenges, one bright spot is the rapid advancement of artificial intelligence (AI). AI’s ability to drive productivity improvements across various industries is undeniable. From automation to data analysis and process optimization, businesses are leveraging AI to reduce costs, streamline operations, and make better-informed decisions. As these technologies evolve, they are expected to unlock new growth opportunities and drive innovation across sectors. This technological shift could be a catalyst for long-term economic growth, as companies increasingly tap into AI to achieve new levels of efficiency and productivity.

With the uncertainty and shifting economic landscapes, our primary goal remains the same: to invest your assets safely while achieving a fair rate of return.

Very Truly Yours,

Michael F Cantlon
Thomas E Guyett
Robert T Gephart