2025 Mid-Year Investment Review & Outlook (Video)
In this mid-year 2025 market update, Ben Hockema, CFP® breaks down what's driving markets so far this year—and what may be ahead. He discusses why U.S. stock valuations leave little room for error, how bonds are finally looking attractive again, and why Illuminate portfolios remain overweight international equities.
Ben also shares our base case for the second half of the year, including key expectations for stocks, bonds, commodities, and even IPO activity. He explains how we're positioning portfolios on the margins—and why thoughtful rebalancing now can make a big difference later.
Whether you’re wondering if it’s time to sell tech stocks, buy bonds, or just understand the risks ahead, this video provides the clarity you need for smart investing in 2025.
Quick Summary
Market Overview: Where We Are Now
Global markets are up for the year.
However, US stock valuations are elevated, particularly among large-cap growth and technology companies.
Strong returns in the second half would require both earnings growth and an increase in valuations—something we see as unlikely from here.
What We're Doing in Portfolios
We’re continuing to underweight U.S. stocks and maintain a larger allocation to international equities, where we see better long-term value.
We’re increasing our allocation to bonds, which are more attractive now than they’ve been in years.
We’re avoiding high-yield and corporate bonds with low compensation for risk, and focusing instead on Treasuries, TIPS, and municipal bonds.
Gold and energy remain strategic holdings—gold continues to benefit from the broader commodity cycle, and energy may rebound in the months ahead.
We’re making small, intentional rebalancing moves, not wholesale changes.
Looking Ahead: What We Expect
Bond returns are skewed to the upside, especially if interest rates fall.
International stocks are likely to continue outperforming U.S. stocks.
The third quarter may be soft (as history suggests), but we expect strength in the fourth quarter.
A pickup in IPO activity later this year would be a positive sign for broader markets.
