The Word of the Year? Resilience

While emerging markets have led the way, U.S. and developed ex-U.S. returns have been exceptional. Public natural resources and global listed infrastructure returns have also been positive, and even real estate has generated nearly double-digit returns. Successful investors have been able to remain invested through the news and noise, focusing instead on the strong fundamentals, including strong earnings and cash flows.

The word of the year for the U.S. is “resilience.”  While the headlines associated with various risk scenarios pile up, both the economy and corporate results have been resilient to these forces. Economic growth in particular has surprised to the upside as companies and consumers continue to spend. Companies have been able to navigate the changing trade landscape, continuing to notch strong profit margins in spite of pricing pressures and higher costs. Consumers remain supportive in the face of higher prices and a softening labor market.

Where do we go from here? We continue to see resilience as the watchword, but we also anticipate a slower pace of economic growth going forward. On the macro level, this means slower GDP growth, driven primarily by a slower pace of consumer spending. A key driver of spending is labor income: With slower hiring and wage growth, we can anticipate weaker spending. At the company level, earnings estimates for the S&P 500 continue to climb. Consensus is calling for just over 10% growth in earnings-per-share in 2025 and nearly 14% growth next year. 

While there has been a lot of talk about bubbles, we do not think the technology sector is there… yet. Momentum has been extremely strong around AI and technology companies again in 2025, driving tech-sector equities in particular to elevated valuation levels. According to FactSet, the price-to-next-12-month-earnings (P/NTM) ratio currently sits at roughly 30X against its long-term average of 20X, and this has led some investors to draw parallels with the bubble/bust of 1999-2000. It is important to assess the facts, however, and there we see some stark differences between the “tech wreck” of 2000 and today.

Today, tech earnings growth is strong and, in some cases, accelerating. Free cash flow growth is even stronger — particularly across the largest tech companies. Balance sheets are also exceptionally strong, with positive net cash and low leverage across the sector. Finally — and importantly — today’s AI optimism is grounded in visible and sustainable demand trends coupled with true monetization opportunities. Are these stocks expensive? Yes. And ultimately this will influence forward returns, which will likely be more muted than what we have recently experienced. Is this a bubble? Based on the fundamentals, we do not think so.

Answer provided by Pamela Lucina, Head of Family Office Solutions, Global Family Office.

Due in part to changes to the tax code resulting from the One Big Beautiful Bill Act, there are several significant tax planning insights to share as 2025 draws to a close. Below, we highlight several key strategies for consideration with your tax advisors.

Given the new limits on income tax charitable deductions beginning in 2026, taxpayers should consider bunching their future charitable giving into 2025 to maximize the tax benefit — and taxpayers can increase the tax benefit from their donation by giving appreciated stock. They can also consider making gifts to donor advised funds and accelerating charitable pledges.

Taxpayers over age 70 ½ can make qualified charitable distributions from their IRAs of up to $108,000: This is not includible in your taxable income and can count toward your required minimum distribution.

Finally, taxpayers can give up to $19,000 each to an unlimited number of individual beneficiaries using the gift tax annual exclusion. Note that, to qualify, the beneficiary must receive the gift by December 31, 2025.