2025 Six Key Themes

Economic forecasting is challenging, but understanding the capital cycle can help. Led by investment in AI, the US has embarked on a new capital cycle. The result is a shifting landscape of likely industry winners and losers.

Investors of all stripes seek massive profit growth, leading to index concentration. Big profits lead to increased competition, eventually eroding returns. Distinguishing at-risk profit pools from durable ones is key for active investors.

Investors welcome deregulation under Trump 2.0. The US government played a dominant role in financial markets under the last three administrations. How might stocks fare with a smaller government?

Capital cycles are imperfect, showing a tendency for booms and busts. Over the past year, investors have focused on the economy and interest rates when assessing risk. That emphasis may be misplaced because that wasn’t where the boom was.

Rob Almeida suggests that while recent market turmoil may not last, a backdrop of higher costs and lower growth could make for a more challenging operating environment ahead.