Market Analysis August 2025

We find ourselves, once again, writing to you as equity markets reach new all-time highs and analysts across the board are starting to question where this market might go. And once again, we agree with the prevailing sentiment and remain cautious about assuming that equities will continue to outperform their long-term historical return averages of 7–8% over the coming years. 

Much of the recent upward momentum is driven by heavy investment in artificial intelligence and speculation around its potential for future efficiencies. While this narrative has created significant enthusiasm, it alone is unlikely to sustain a continued bull market indefinitely. Valuations in public equity markets are elevated, and we believe it’s prudent to remain measured when assessing return expectations from here. 

In contrast, municipal bonds continue to present compelling opportunities. The current yield curve shows a minimal spread between 18- and 30-year maturities: for example, AA-rated 20-year munis are yielding around 4.50%, with 30-year bonds only slightly higher. This compression has allowed us to secure attractive, tax-equivalent yields in the 7–8% range by focusing on shorter-duration, high-credit-quality municipal securities with yields that are increasingly rare across other public market options. 

Our approach continues to prioritize long-term growth while managing downside risk that ensures our client’s assets are resilient in unpredictable markets and available when needed. In this light, the risk-adjusted return potential of municipal bonds remains especially appealing for our clients in higher tax brackets. 

For portfolios with a greater risk appetite, we maintain a strong preference for private market opportunities. These investments tend to exhibit lower correlation with public markets and offer the potential for enhanced returns without the volatility of daily market swings. We are actively sourcing managers across private equity, private debt, real estate, and other asset classes who are investing in companies with durable business models and sound fundamentals. These strategies serve as a meaningful complement to more traditional holdings particularly over a longer time horizon. 

While the venture capital landscape remains under scrutiny, we view the current environment as potentially opportunistic. Lower valuations are allowing for more favorable entry points, and we believe this will serve our clients well over time as capital flows into high-impact, thoughtfully constructed portfolios.   

Lastly, as many of you know, we have already been deploying private investments in our clients various IRA assets for the longer duration, lack of liquidity, and higher risk that is balanced with higher return potential. We are able to accomplish this within our custodian for many of our investments and through a self – directed IRA company for other assets. We are closely watching any future changes to rules allowing for private investments in the broader 401k arena and how that may affect the marketplace. 

Diversification always remains our key determinant and tool for managing risk for all of our portfolios as well as matching asset allocation to our client’s personal needs and values. 

Full analysis coming soon.