In a time marked by global uncertainty, volatile markets, and shifting economic policies, investors are searching for clarity and confidence.
In a recent economic webinar hosted by Cheetah, AssetMark’s Chief Investment Officer Christian Chan and Chief Market Strategist Kezia Samuel offered exactly that. With decades of experience and a sharp eye on macroeconomic trends, their analysis helps make sense of the current landscape—and points toward practical steps investors can take to stay steady and strategic.
Here are the key takeaways.
The market has changed—so should your strategy
After years dominated by U.S. mega-cap growth stocks, the market is undergoing a major rebalancing. So far in 2025, the S&P 500 is down over 8%, but that’s not the whole story. Bonds, commodities, gold, and especially international equities are up. This shift has revitalized the role of diversification, which had taken a back seat in recent bull markets.
Notably, traditional “moderate” portfolios—such as a global 60/40 mix—are outperforming the U.S. equity market. That hasn’t happened in years and serves as a reminder that broad-based allocation still works, especially when the U.S. market takes a breather.
Chan and Samuel also noted that the pain in U.S. stocks isn’t evenly distributed. The so-called “Magnificent Seven” tech and AI-driven stocks that soared in recent years are now dragging down indices, while dividend and value-oriented equities are holding up better.
The new reality of policy risk
If one theme dominated the webinar, it was uncertainty—especially around economic policy. Chan pointed out that early-stage executive actions, like tariffs and immigration limits, have an unmistakable stagflationary tone: higher inflation, lower growth.
Tariffs, in particular, are acting as a tax on consumers and businesses. If current reciprocal tariffs are enacted and met with full retaliation, they could cut U.S. GDP growth by 1.5%, potentially dragging the economy close to recession territory. However, the administration is working on bilateral trade deals, which could blunt the worst effects. As Chan emphasized, the sequence of policy matters as much as the content.
Later-stage policies—such as fiscal stimulus, tax reform, or deregulation—could support growth. But for now, investors are navigating the fog of early-cycle uncertainty.
Is the consumer still king?
Despite all the noise, the U.S. economy grew by 2.8% in 2024, driven largely by resilient consumer spending. But will that last?
Samuel emphasized the critical role of consumer behavior in sustaining economic momentum. Spending hasn’t slowed much—TSA travel data and credit card activity remain strong—but sentiment has deteriorated sharply. In fact, the University of Michigan’s consumer sentiment index shows that Americans feel worse now than they did during the 2008 financial crisis.
That disconnect is key. If high-income households—which account for a disproportionate share of spending—begin to cut back, the economy could shift quickly toward contraction. For now, though, there’s no clear signal that’s happening.
Positioning for what’s next
So what should investors do?
1. Diversify beyond the U.S.
International equities, particularly in developed markets, are enjoying a renaissance. Policy changes in Europe and a weaker U.S. dollar are helping lift returns. Meanwhile, U.S. earnings growth expectations have been sharply revised downward, from 15.2% to 8.6%, while international projections have risen.
That valuation gap—combined with improving fundamentals—makes international stocks a compelling play.
2. Revisit your fixed income
Short-duration bonds are currently offering yields near 4.6%, with less risk than longer-term securities. If interest rates rise, you’re protected; if they fall, you’re still earning income. It’s a sweet spot for investors seeking stability without sacrificing return.
3. Don’t overlook munis
Municipal bond spreads widened recently due to tax-season selling, increased issuance, and Treasury volatility. But that dislocation has created opportunity: after-tax yields are now near 6.5–7% for top income earners. For those in high brackets, muni ladders could be a smart addition.
Corrections are normal—stay the course
This year’s nearly 19% decline flirts with bear market territory, but it doesn’t necessarily spell crisis. As Samuel reminded attendees, corrections are a healthy part of market cycles, not a signal to panic.
Historical data shows the average 10% drawdown lasts about 100 trading days. If your portfolio is well-constructed and aligned with your goals, reacting emotionally—especially in retirement accounts like 401(k)s—can do more harm than good.
In fact, long-term 401(k) investors tend to outperform precisely because they tinker less.
Final thoughts: Discipline over drama
Chan and Samuel’s guidance is clear: In a noisy world, focus on what you can control.
- Diversify intelligently across geographies and asset classes.
- Adjust for short- and medium-term interest rate dynamics.
- Use volatility to rebalance, not to retreat.
- Keep your financial plan central to your decision-making.
Investing always involves uncertainty—but smart, long-term strategies win. Now is the time to stay thoughtful, stay calm, and stay invested.
