Uh-oh, your 2025 market outlook’s already out of date

Key takeaways:

• The markets have reacted to the unprecedented wave of policy actions from the new Trump administration
• Some asset managers have already moved to provide updates to their market outlooks
• With no historical precedent, many feel compelled to pivot and update their strategy and can build goodwill in the process of staying in front of investors

We are about six weeks into 2025 and investment outlooks already need to be updated!

Most of our clients spend significant time and a tremendous amount of energy to create an investment outlook at the start of each year. It is often a multi-week process of assimilating viewpoints across teams and trying to offer investors a playbook for the coming year. These outlooks often contain important insights on how to position portfolios for the year ahead. Many firm also provide a midyear update as well, recounting the first half and making any necessary adjustments.

But what happens when your outlook is already outdated in February?

First, take a deep breath and know that you are not alone. There is no historical precedent for the wave of executive actions in the first few weeks of the new administration. While most outlooks anticipated changes to immigration, tariff and tax policy, few expected the flurry of activity we’ve seen in the Trump administration’s first days.

"Trump is apt to have flipflopped on any policy proposal between the time we’ve completed the Green Book and the time it is published online (about six to eight hours).”

In a commentary last week, Wisdom Tree noted, “There weren’t too many market observers who penciled in higher tariffs on Canada than on China, but that’s where things stood, at least for a few hours, before Trump struck a deal with Prime Minister Justin Trudeau…”

Leuthold Group, the Minnesota-based investment research firm known for their shrewd markets analysis, encapsulated how tough it is for market prognosticators in the introduction to the firm’s monthly (gated) Green Book, “But there’s the problem of timing. Trump is apt to have flipflopped on any policy proposal between the time we’ve completed the Green Book and the time it is published online (about six to eight hours).”

While many firms feel uncomfortable knowing their outlook is outdated, all is not lost.

Stay in front of what has changed with interim commentary

Recent market volatility triggered by the nearly hourly news coming out of the Trump administration led a number of firms including Invesco, RBC, Alliance Bernstein and Royce Investment Partners to offer their perspectives to investors on tariff news and their revised market outlooks.

While the trite phrase “the only constant is change” is overused, it is especially true in the first few weeks of this year. Markets have been policy, not data driven. And the administration’s policy pronouncements and executive orders are, if anything, unpredictable.

With all that said, clients and prospects will forgive you for failing to predict a meaningful Trump executive action. Lean into the fact that “no one would have predicted this,” and use the opportunity to deliver your thoughtful analysis and what it might mean for investors.

This doesn’t mean you have to have an answer. Even if you did, policies could easily change yet again. Let readers know that the path ahead is not yet clear and instead offer optimistic, neutral and cautious scenarios.

Play to your strengths

We are truly in a “who knows what will happen” space. Before the election, many expected rates to continue to drop. But now, some market analysts and economists suggest that rates may stay higher longer. And some are suggesting the stock market will broaden with small cap, value stocks or international stocks finally outshining the Magnificent Seven—the narrow group of tech-oriented growth stocks that dominated 2024’s returns.

Could this be an opportunity for active managers, alternatives managers, small cap and international specialists to build a case for why 2025 could be their year? Remind investors that the markets move in cycles and a change of leadership may be possible even if it might take time to take hold.

Publish an update—and remind readers of the tried and true

It is still early in the year. Refreshing your outlook with new insights a few weeks into a new administration that delivered earlier than expected on several campaign promises may make sense. Link to your outlook and describe what has changed. Discuss why you’ve shifted your outlook. But don’t forget to remind readers what hasn’t changed.

Market outlooks, by their very nature, are generally short term. And while your market outlook may focus on near term changes, remind investors that success requires doing a number of basic things right over the long term—sticking to a plan, keeping emotions in check and not being afraid to embrace market downturns as a buying opportunity.

The truth is, a lot of investors may be curious to know how your views have changed just a few weeks into the year, and publishing an updated outlook gives them the chance to hear from you. More content means more potential for engagement, whether on social or on your website—make sure your digital marketing team is ready to track and report.