At Marketing Wiz, our team actively monitors global financial markets to contextualize relevant stories for our clients and their stakeholders. This January, here are three themes that can serve as the foundation for a custom long-form article on behalf of your firm:
Storm Clouds Circling the US Economy
- US economic growth remains robust, with GDP rising 3.1% in Q3 2024. Recent data, however, shows that high interest rates may finally be catching up with consumers and businesses.
- Defaults on credit cards have risen to their highest level since 2010, particularly as lower-income households struggle. Business bankruptcies are also climbing, with H1 2024 seeing an 8% increase in filings among companies with more than $100M in assets.
- While economic risks have risen, any recession this year is likely to remain mild. Despite a recent uptick, unemployment remains low, and falling rates in 2025 should provide some breathing room to both companies and consumers.
Asset Allocation in 2025: What’s Changed?
- 2024 was a boom year for stocks, although bond performance was muted owing to a late sell-off. Geopolitical volatility, meanwhile, has benefited assets like gold and bitcoin. As we enter the new year, how is optimal asset allocation shifting?
- As interest rates fall over the course of 2025, the opportunity cost of holding cash will rise. Barring near-term liquidity needs, investors should seek to keep capital deployed. Declining bond yields could also mean that investors need to take on additional duration or credit risk to achieve income targets.
- While cash-flow measures show that US equities are not as overvalued as they might initially appear, current price levels do introduce an increased level of risk. Although stocks will remain the core of most portfolios, investors should consider diversifying through low-volatility alternative assets like private equity and credit.
Wealth Planning in 2025: Tax & Estate Updates
- With Trump taking office and Republicans in control of both chambers of Congress, significant wealth planning changes are in store this year. Many provisions from Trump’s 2017 Tax Cuts and Jobs Act will likely be extended, but uncertainty remains.
- In 2025, the lifetime gift and estate tax exemption amount will rise to roughly $14 million. Unless Congress takes action, however, this amount is set to fall by nearly half in 2026 as provisions expire.
- Several changes from the SECURE 2.0 Act are set to enter into force in 2025, including increased catch-up contribution levels and finalized required minimum distribution rules. Investors should work with their advisors to ensure that their wealth plans are updated in line with these changes.
Interested in building out long-form collateral relating to any of these themes? We invite you to reach out to our team today for a discussion of our custom content capabilities.