August Monthly Insights: U.S. Economy Growth • Stock Market • Private Investments
📈 U.S. Economy: Growth Is Slower, But Still Moving
The U.S. economy grew by 3.0% in the second quarter of 2025 (April–June), after shrinking by 0.5% in the first quarter. That gives us about 1.2% average growth for the first half of the year — slower than 2.5% growth in 2024, mostly due to less consumer spending. (Bureau of Economic Analysis (BEA))
➡️ Prices are rising, but slowly: Core consumer prices (excluding food & energy) rose 2.5% (Bureau of Economic Analysis (BEA))
Even with new tariffs, we think price increases are temporary and won’t change the longer-term trend of falling inflation.
🔍 The big question: Will consumer spending bounce back, or is the slow-down here to stay? We're leaning toward a bounce back, but it's something to watch closely.
💼 Stock Market & Investment Strategy
New tariffs are making companies a bit more cautious.
Expected S&P 500 profits for Q3 and Q 4 2025 are now +7%, down from +10% earlier this year. (Source: Factset and LPL research) Tariffs could hurt global growth, as companies struggle with supply chains and uncertainty.
💡 What might the Fed do? We believe the Fed may still cut interest rates later this year, especially if inflation cools and the job market slows down a bit.
Big tech and AI-related stocks are still leading the market rally — thanks to strong earnings and investor excitement.
In June & July, our shift toward AI-focused active funds and mega-cap tech paid off. Exposure to Europe and emerging markets also boosted returns.
🔍 Spotlight: Private Investments Are Gaining Attention
63% of Millennials and 49% of Gen Z want more in their portfolios like crypto, private credit, and private equity.
A recent advisor poll shows 73% of advisors put at least 5% of wealthy clients’ portfolios into private investments.
Private markets have delivered strong returns over the past 10 years and help diversify portfolios.
But there’s no one-size-fits-all. The “right amount” depends on your goals, timeline, and risk tolerance.
💰 Tax Update: SALT Deduction Gets a Boost
A new law, the One Big Beautiful Bill Act (OBBBA), raised the limit for deducting State and Local Taxes (SALT) from $10,000 to $40,000, starting in 2025!
⚠️ But there’s a catch:
If your income (AGI) is above $500,000, the higher SALT limit starts to phase out.
By $600,000, the limit goes back down to $10,000.
This is big news for high-income earners in states with higher taxes like MD, CA, NY, NJ, and VA.