Despite concerns over potential disruptions from U.S. tariffs, equity markets have continued to advance in early 2025, driven by optimism surrounding U.S. President Donald Trump’s anticipated policies. The Stan Wong Group remains positive on equities, particularly U.S. stocks, citing a favorable economic backdrop and strong corporate earnings.
Despite concerns over potential disruptions from U.S. tariffs, equity markets have continued to advance in early 2025, driven by optimism surrounding U.S. President Donald Trump’s anticipated policies. Expectations of corporate tax reductions and regulatory easing have fuelled investor confidence, fostering a pro-growth environment that is helping to offset uncertainties around global trade.
At The Stan Wong Group, we remain positive on equities, particularly U.S. stocks, as the first quarter of 2025 unfolds. The U.S. economy is showing balanced growth – strong enough to support corporate earnings yet moderate enough to keep inflation pressures in check. This favourable backdrop, supported by steady GDP expansion, stable inflation, strong consumer spending, and a resilient labour market, sets the stage for a potential third consecutive year of gains for U.S. equities.
Historical trends also reinforce a positive bias. Post-election years have typically been strong for equities, with the S&P 500 averaging an 18.1 per cent return in the first year following a presidential election over the past ten cycles, with a 90 per cent win ratio. The January Barometer—a theory that suggests January’s market performance predicts full-year returns—also signals a constructive outlook. Since 1950, a positive January has led to an average S&P 500 return of 12.
Our investment strategy remains centered on high-quality, secular growth companies. We favour sectors such as health care, financials, and technology, focusing on businesses with strong competitive advantages, reliable earnings, and attractive valuations. Currently, we are allocated 73 per cent to U.S. equities and 27 per cent to Canadian equities, balancing strategic positioning with tactical flexibility.
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