IG Wealth 2025 Market Outlook: Valuation Trends to Watch
IG Wealth has recently released its 2025 Market Outlook report, emphasizing that the focus is on identifying trends rather than making bold predictions. According to Philip Petursson, the chief investment strategist for IG Wealth Management, the purpose of this report is to provide clients and investors with a sense of direction in the ever-evolving market landscape.
One noteworthy aspect of the report, titled “2025 Market Outlook: Navigating the New, New Normal,” is the emphasis on fixed-income investments. Petursson highlights that the current fixed-income environment offers higher yields, which can benefit fixed-income investors.
In terms of economic growth, Petursson and his team are optimistic about global economic conditions, despite some regional variations. While the S&P 500 experienced a 23% growth in the previous year, characterized by high multiples and robust corporate profits, Petursson anticipates that 2025 will see strong profits but more modest equity valuations. He attributes this shift to long-term bond rates exceeding four percent, which may temper inflated stock prices.
Despite the allure of high-growth tech and AI stocks, Petursson suggests that a slightly overweight position in bonds could be advantageous for investors in 2025. He emphasizes a conservative approach to investment, focusing on the broader financial planning experience that extends beyond investment returns to encompass tax management, estate planning, and account structure.
Acknowledging the potential for modest equity returns in 2025, Petursson anticipates corporate profits to be in the mid-teens with total equity returns around five percent. This cyclical pattern of valuation fluctuations is familiar to Petursson, reflecting a dynamic observed over time in the market.
Despite geopolitical uncertainties and policy shifts, Petursson remains steadfast in his strategic outlook, drawing on his extensive industry experience of over 30 years. He downplays the market impact of incoming U.S. administrations, citing historical trends that reveal minimal market disruptions.
On the topic of potential tariff impositions and economic sabre-rattling, Petursson maintains a pragmatic stance, viewing such actions as negotiation tactics rather than definitive policies. While hypothetical scenarios involving high tariffs and global repercussions exist, Petursson assigns a lower probability to such outcomes.
As an experienced industry professional, Petursson emphasizes the value of diversification and long-term investment horizons. He views market fluctuations through a lens of humility rather than predictive certainty, underscoring the importance of adaptability and resilience in navigating the ever-changing financial landscape.
