All –

2024 was filled with incredible memories and amazing client stories! One of the highlights for us has been hearing about how the market’s strong performance helped many of you check off those “bucket list” items. Whether it was a dream trip, a milestone celebration, or another life goal, your stories truly inspire us and remind us why we love what we do.

As we close the chapter on this fantastic year and look ahead to 2025, I wanted to share some insights on what I’ll be keeping an eye on in the coming year—for those of you who are interested. Here’s to another year of growth, opportunity, and, of course, more wonderful stories to share!

What to Expect in the Stock Market in 2025

As we gear up for 2025, the stock market feels like a suspenseful movie—packed with potential twists, thrills, and a touch of drama. While the traditional “Santa Claus Rally” might be taking a breather this holiday season, investors are already eyeing what’s next in the year ahead. Here’s a sneak peek at what’s likely to make waves in 2025!

2024: A Year of Winning Streaks and Sky-High Valuations

Let’s face it, 2024 was a party for growth and tech investors. The S&P 500 danced its way to a 23.3% gain (Reuters), leaving its 10-year average in the dust. But after the confetti settles, the big question remains: Can this momentum last in 2025? With market valuations flying high, it’s time to tread carefully—especially with economic uncertainties and global tensions waiting in the wings.

Geopolitics and Policy: The Plot Thickens

I believe that Donald Trump’s return to the White House is bound to shake things up. Will his policies spark a trade war, or will tariffs become strategic bargaining chips? While global supply chains grapple with de-globalization, shifting production away from China is proving harder than a Sudoku puzzle on expert mode.

The wildcard? High-profile voices like Elon Musk and Jamie Dimon might steer Trump’s trade strategies, adding an extra layer of intrigue. Keep a close watch on tariffs targeting Mexico, Canada, and China—they could set the tone for market sentiment.

The Federal Reserve: The Puppet Master

The Fed’s actions are the stock market’s equivalent of a plot twist. While rate cuts are expected, hawkish undertones suggest they might not arrive as fast or deep as hoped. This slower pace has already cast shadows over real estate and utilities. But here’s the twist: despite rising long-term bond yields, economic fundamentals remain strong, with consumer spending and financial stocks shining brightly.

AI and Tech: The Star Players

The AI boom? I believe it’s just getting started. Hyperscalers are dialing up spending on infrastructure, and companies like Nvidia (NVDA) are basking in the limelight. But the underdogs—Broadcom (AVGO), Marvell (MRVL), and AMD—are entering the ring with big ambitions. AI might take years to fully monetize, but its long-term potential makes it a show-stopper for savvy investors.

Valuations and the Big What-Ifs

Wall Street’s crystal ball predicts an 8.2% gain for the S&P 500 in 2025, but it’s not a slam dunk. Scenarios range from a 14% surge (no recession!) to a 20% slide (cue the bear market). The outcome will hinge on economic growth, inflation, and interest rate magic. (Investing.com)

5 Themes to Watch in 2025

1. Firming Labor Market
   Unemployment is low, and the labor force isn’t growing much. This could mean tighter conditions and more job openings. The Fed’s expected rate cuts might create ripples, shaping the job market—and your portfolio—in unexpected ways.
2. Falling Cash Yields
   With cash rates dropping, sticking with cash is like holding onto a dud firework. Historically, equities outshine cash during rate-cutting cycles, delivering average returns of 16.66% one year after the first rate cute. It’s a strong case for swapping excess cash for assets with higher growth potential. (Franklin Templeton)
3. Broader Equity Earnings Growth
   The “Magnificent 7” (you know who they are) may have stolen the show, but in 2025, the rest of the S&P 500 could finally step into the spotlight. Earnings growth for the “493” is set to triple—yes, triple—creating opportunities for broader market performance. (Inc.com)
4. Revved-Up M&A Activity
   Deal-making is thawing faster than a snowman in July. With deregulation likely under the new administration, mergers, IPOs, and financial market activity are poised for a comeback. Wall Street banks, private equity, and credit firms are ready to reap the rewards.
5. AI Infrastructure Expansion
   AI isn’t just the future—it’s the now. But powering these tools demands serious upgrades to energy and data center infrastructure. The U.S. grid needs a boost, and hyperscalers are pouring money into making it happen. This long-term theme is one to watch.

2025 Outlook: Ready, Set, Invest

The stock market in 2025 is shaping up to be a mix of opportunity and caution. From rate cuts and AI innovation to geopolitical surprises, there’s plenty to keep investors on their toes. By focusing on diversification, balancing risk, and spotting long-term growth themes, I can hopefully help add some piece of mind to my clients’ in reaching their financial goals.

A Final Message with some exciting opportunities

As the year comes to a close, Lauren and I want to take a moment to express our deepest gratitude to all of you. Thank you for placing your trust in us over the years, for the meaningful partnerships we’ve built together, and for sharing your incredible stories with us. Your support and connection mean the world to us, and we genuinely appreciate each of you.

As we plan for 2025, we’re excited to continue growing—but only in the “right way.” That means working with more amazing people like you! Our goal for the coming year is to welcome 10 new clients who share our values and add over $6 million to the assets we manage.

We’re also thrilled to share that we’ll be launching new podcasts and video content through Lockwood Financial in 2025! These will be designed to provide valuable financial insights and make it easier than ever to share what we do with your friends and colleagues.

If you know someone who might benefit from working with us, we’d be honored if you kept us in mind. Here’s to an exciting year ahead, and thank you again for being such an integral part of our journey.

Here’s to a strategic and successful 2025—because when it comes to the market, preparation is essential! 🎉

Philip Lockwood | Founder + Managing Partner

Address: 1501 Ingersoll Ave. Suite 201  Des Moines, IA 50309 Phone: 515-274-8006

Email: Plockwood@parklandrep.com Website: Lockwood Financial Strategies   Securities offered through Parkland Securities, LLC, member FINRA (FINRA.org) and SIPC (SIPC.org). Investment Advisory services offered through SPC, a Registered Investment Advisor. Lockwood Financial Strategies, LLC is independent of Parkland Securities, LLC and SPC  Securities offered through Parkland Securities, LLC, member FINRA/SIPC.