That seems to be the main take-home point from poring through the mass of predictions and asset allocation commentaries that have come in during the past few weeks ahead of the holiday break. 

The US continues to set the investment pace, and its stock market. Valuations are relatively high but are mostly (key caveat) justified by the “fundamentals”.

As far as the S&P Index of US equities is concerned, there has been some easing in valuations of stocks already. The price-earnings ratio, on a forward basis, is 24.14 times earnings, down from 25.2 in the previous quarter and down from almost 29 a year ago, or down 16.5 per cent on a year before. Three years ago, it was about 18.6.

The “Magnificent Seven” Big Techs have wowed us with their performance in recent months: (Alphabet (the parent company of Google), Amazon, Apple, Meta (owner of Facebook, WhatsApp and Instagram), Microsoft, Nvidia and Tesla. And a general sense one gets is that they can run a while yet before there’s a significant bump in the road. But even so, a number of banks and asset managers talk about broadening out where they invest.

HSBC Global Private Banking and BNP Paribas, to give two examples, take this view. (See here for HSBC). Another that expects the US equity opportunity set to broaden in 2025 is UK-headquartered abrdn; Standard Chartered likes US equities, expecting a new Donald Trump administration will turbo-boost the US economy. , the UK wealth manager, summed up the thinking of many: “While 2024 has been a year of stabilisation, with inflation and interest rates finally easing and economic growth proving to be more resilient than expected – factors that helped to deliver a stellar return for those investing in US equities – headwinds remain. Inflation risks are back on the agenda and government debt levels, along with simmering geopolitical tensions, are still a cause for concern.

We noticed that for several wealth managers, the prospects of higher US tariffs on China, Europe and certain other nations in 2025 – a plank of Trump’s campaign – could add to inflationary pressures, as could a big crackdown on illegal immigrants if that squeezed the US labour market. 

Private markets
As readers know, private markets (credit, equity, property and infrastructure) have boomed over the past 20 years, coinciding with a shift from listed to private markets, and accelerated by the long period of ultra-low interest rates and a hunger for yields from less liquid assets. At , a Geneva-based external asset manager, said in a note this month that gold has been the best relative contributor to multi-asset portfolios this year.