RADNOR, Pa.--(BUSINESS WIRE)--Lincoln Financial (NYSE: LNC) released its first quarter edition of Market Intel Exchange, curated from the company’s in-house investment expertise and in partnership with industry-leading asset managers. The report provides insight into key economic and market trends likely to be top of mind for investors in 2025.
Key insights include:
The Fed is supportive, but rate cut expectations are shifting: The Federal Reserve’s summary of economic projections released in December indicated that the central bank expects both a stronger economy and stickier inflation as we move through 2025. While this may result in a more cautious approach to monetary easing, the cutting cycle is expected to continue. Analysis by Lincoln reveals that continued economic strength has the potential to be supportive of stocks, as they historically perform well during cutting cycles when the economy does not enter a recession with a +20% gain 12 months following the first cut.
Policy uncertainty could impact the economy and markets: The latest report breaks down the possible tailwinds and headwinds that the incoming administration could bring to both the economy and markets. Since the election, financial markets have been largely focused on the potential tailwinds, namely tax cuts and deregulation, optimistic that they could stimulate economic growth and boost corporate earnings. However, there is lingering uncertainty about the potential inflationary impact of the proposed trade and immigration policy. Although decisions made in Washington can impact markets in the short run, over the long term, investors are best served by tuning out the noise and focusing on their long-term plan.
Back-to-back 20% gains for the S&P 500 aren’t a reason to be bearish: The S&P 500 rose 25% in 2024, marking the second consecutive yearly gain of 20% or more (26.3% in 2023) and the ninth such occurrence since 1950. While recent strength may cause concern for investors heading into 2025, history shows that stocks often continue to perform well into the following year. Following the eight previous occurrences, stocks were higher the next year six times with an average gain of more than 12%. However, the report highlights that a meaningful pullback may be likely. More than 50% of all calendar years have seen a double-digit correction, but despite this, more than seven out of every 10 have still delivered positive returns.
“Heading into the new year, many investors are seeking guidance on how to navigate markets and thoughtfully position their portfolios in what’s shaping up to be a dynamic environment. 2025 is poised to bring about both investment opportunities, as well as some challenges, so it’s a good time for investors to ensure portfolios are adequately diversified to weather any potential bouts of volatility – especially given relative asset class performance over the last two years,” said Jayson Bronchetti, Chief Investment Officer at Lincoln Financial.
More insights from Lincoln Financial and its network of asset management partners can be found on the Market Insights page.
About Lincoln Financial
Lincoln Financial helps people confidently plan for their vision of a successful financial future. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of September 30, 2024, the company has $324 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.
LCN-7506091-010725
© 2025 Lincoln National Corporation. All rights reserved.
Lincoln Financial is the marketing name for Lincoln National Corporation and insurance company affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN, and in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY. Variable products distributed by broker-dealer/affiliate Lincoln Financial Distributors, Inc., Radnor, PA. Securities and investment advisor services may be offered through non-affiliated broker dealers.
This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY, and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.
