2025 Mid Year Update

As we pass the mid-year mark, Heights Wealth Management provides clients with an update to a stock and bond market that has been anything but normal in 2025.

🔍 Key Market Themes

1. Strong U.S. equity momentum

The S&P 500 is up approximately +5.8% year-to-date as of July 8 (source: Yahoo Finance), supported by continued strength in tech and AI-driven sectors.
Gains have been more modest recently, as the market adjusts to policy shifts and mixed economic signals.

2. Bond market stability

The Bloomberg U.S. Aggregate Bond Index (AGG) is up +1.1% year-to-date as of July 8 (Yahoo Finance), reflecting modest total returns from core fixed income exposure in a still-uncertain rate environment.

📰 Broader Economic Trends

Policy shifts are stabilizing sentiment—tariff pressures have eased, and talk of tax cuts and regulatory reform is on the rise.
Market watchers see this as a mid‑year “reset” opportunity: broaden equity exposure, emphasize income-producing assets, and diversify globally.
Dividend-paying stocks, while underperforming growth stocks year-to-date, are seeing renewed interest amid a desire for consistency.
Bonds remain important but require selectivity—short- and medium-term maturities are favored as long-term inflation and fiscal policy remain in focus.
Economic data is mixed. Some soft patches are emerging, but earnings and GDP trends remain broadly positive.

📌 What It Means for Your Portfolio

Asset Class	Year‑To‑Date Return	Implication
U.S. Equities	+5.8% (S&P 500)	Steady recovery after April’s downturn, with strength in tech and large-cap growth. Continue maintaining diversified exposure.
Bonds	+1.1% (AGG)	Core bonds are helping with stability. Focus is on short- to medium-duration positions.
Dividend Stocks	~+3% (S&P Dividend Aristocrats)	May regain favor as markets seek consistent income and defensiveness.

📈 Our Positioning at Heights Wealth Management

U.S. equities: Maintaining a diversified stance with a tilt toward high-quality, dividend-paying companies across sectors and geographies.
Fixed income: Trimming long-duration bonds and favoring shorter- and medium-term bonds to manage interest rate risk.
Tactical alertness: Taking these potential economic impacts into consideration alongside the stock market near all-time highs, we are keeping our exposure to small-cap and aggressive growth-type stocks low and focusing on high-quality dividend-paying companies to smooth out any potential volatility.

Links to sources:

https://am.gs.com/en-us/advisors/insights/article/market-pulse?sc_cid=us%7Eeml%7Eadbcmpgn%7Emrktplse%7Ejul%7Epub%7Eview-online%7EMDAzajAwMDAwMFRlVjBXQUFW&leadId=MDAzajAwMDAwMFRlVjBXQUFW

https://www.blackrock.com/us/financial-professionals/insights/weekly-commentary

https://www.blackrock.com/corporate/literature/whitepaper/bii-midyear-outlook-2025.pdf

https://www.ftportfolios.com/Commentary/EconomicResearch/2025/7/7/not-so-hot