RADNOR, PA — Lincoln Financial (NYSE: LNC) unveiled its first-quarter edition of Market Intel Exchange, offering critical analysis of economic and market trends expected to shape 2025. The report, crafted from Lincoln’s in-house investment expertise and collaboration with leading asset managers, provides insights for investors navigating a dynamic financial landscape.
One key takeaway focuses on Federal Reserve policy. While rate cuts are anticipated, the Fed’s recent projections point to a stronger economy and persistent inflation, suggesting caution in monetary easing. Lincoln’s analysis indicates that stocks historically perform well during rate-cutting cycles, particularly when recessions are avoided, showing average gains of +20% in the 12 months following an initial cut.
Policy uncertainty is another crucial factor, with potential economic tailwinds from tax cuts and deregulation counterbalanced by inflationary risks tied to proposed trade and immigration policies. The report encourages investors to focus on long-term strategies despite short-term market noise stemming from Washington’s decisions.
Equity market performance is also underscored. The S&P 500 achieved back-to-back annual gains exceeding 20% in 2023 and 2024. While some worry this momentum may slow, Lincoln’s research highlights that, historically, stocks tend to deliver positive returns in subsequent years. Even though a market correction may occur—common in over 50% of calendar years—strong long-term performance often persists, with more than 70% of years still ending in gains.
Jayson Bronchetti, Chief Investment Officer at Lincoln Financial, emphasized the importance of preparation as investors enter 2025. “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 Bronchetti.
With its comprehensive insights and strategic recommendations, Lincoln Financial’s Market Intel Exchange provides a vital resource for investors aiming to make informed decisions in the year ahead.
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