2025 Mid-Year Review

What a whirlwind were the first two quarters of the year!

If we simply looked at year-to-date returns, it would seem like a pretty normal year. Up 6% for the S&P 500. Up 4% for core US bonds¹. Sectors that we have liked for a while, including industrials², financials³, and, technology⁴, were respectively up 13%, 10%, and 7% for the year.

But we would be kidding ourselves if we acted like this was a normal year. We had angst and volatility over Trump, trade, and tariffs until much of it was largely walked back. Here’s how it looked. We all know how it felt.

For investors who were long-term focused and held tight or for those that saw a buying opportunity amidst the angst, you were rewarded.

• We continue to believe in prudent diversification in sectors, styles, factors, and regions for equities.
• We continue to believe that the AI boom will continue to unfold and that many companies and sectors will benefit from the developments in AI.
• We continue to be cautious on the long end of the yield curve and in the lowest credit quality when it comes to fixed income.
• We continue to believe that inflation is coming down and growth is slowing, but not to the point of a recession.
• We continue to expect that the Federal Reserve will cut rates by 2-4 times this year, due to slowing inflation and a weakening labor market.
• Finally, we believe that the markets and the economy will benefit from lower regulation, lower taxes, and positive seasonality in the second half of the year.

As always, we will continue to monitor the data and adjust our thesis if the data changes or if risk becomes more elevated than we feel comfortable with.

_{Disclosures & Important Information}

1. _{US Core Bonds are measured here by the Bloomberg US Aggregate Bond Index}
2. _{Industrials are represented by the S&P 500 Industrials Sector GICS Level 1Index}
3. _{Financials are represented by the S&P 500 Financials Sector GICS Level 1Index}
4. _{Technology is represented by the S&P 500 Information Technology Sector GICS Level 1 Index}
5. _{The S&P 500 is a market capitalization-weighted index that tracks the performance of 500 of the largest publicly traded companies in the United States.}
6. _{The CBOE Volatility Index (VIX) is a real-time market index that represents the market’s expectations of 30-day volatility of the S&P 500 index.}

_{Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through WCG Wealth Advisors, LLC, an SEC registered investment advisor. WCG Wealth Advisors, LLC and The Wealth Consulting Group are separate entities from LPL Financial. LPL Tracking Number: #764565}

_{These views are those of the author, not of the broker-dealer or its affiliates. This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. All investments involve risk, including loss of principal. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.}

_{Fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.}

_{Government bonds are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield.}

_{There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.} 

_{The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. You cannot invest directly in an index. Consult your financial professional before making any investment decision.}