A World of Change
Capital Ideas-Mid Year Comments
As we navigate the ever-evolving global environment, here are some of my specific thoughts into the current economic and investment landscape.
Geopolitical Climate and Market Volatility
In 2025, global tensions such as trade wars, regional conflicts, and new tariffs are significantly influencing financial markets. This uncertainty often leads to increased volatility, impacting both investor confidence and the broader economy.
Global Growth and Economic Outlook
Global growth is projected to slow, with estimates around 2.9% for 2025. This slowdown is driven by policy uncertainty, fluctuating consumer confidence, and the lingering effects of recent disruptions. The Federal Reserve has kept interest rates steady at 4.25% to 4.5%, with potential cuts later in the year to stimulate growth. The shape of the yield curve will continue to reflect investor expectations for growth and inflation.
Alternative Investments and Illiquidity
Alternative asset management continues to play a significant role, accounting for just over 15% of total global assets. Investments such as private equity, private credit, real estate, and hedge funds offer higher expected returns but come with longer holding periods and lower liquidity. This illiquidity means investors often need to hold these investments longer than traditional assets. While secondary markets for alternative assets are emerging, the lack of easy liquidity remains a key challenge, especially during volatile economic periods.
Hedging Strategies
Gold and Bitcoin continue to serve as hedges against global volatility. Gold remains a traditional safe-haven asset, while Bitcoin is increasingly used due to its decentralized nature and limited supply, though it is more volatile than gold. Diversifying into other strong currencies can also help mitigate currency risk, especially during periods of U.S. dollar volatility. We use these investments selectively depending on the clients and circumstances.
Staff Growth and Commitment to Service
Our team continues to grow and is committed to providing the best possible service to our clients, adapting to the winds of change most effectively.
Again, please let us know if you have any change to your personal financial situation.
As Albert Einstein once said, “Not everything that can be counted counts, and not everything that counts can be counted.” In these times of change, it’s important to look beyond the numbers and focus on what truly matters.
Thank you for your continued trust and partnership. Stay cool, drink plenty of water and use sunscreen!
Warmest regards,
Seymour W. Zises
