Client Newsletter Q3 2025
Dear Friends,
They say, “may you live in interesting times,” and we certainly do. The third quarter handed investors some nice gains—that’s the good news. But true to form, the market, like our children, beats to its own drum—strong on the surface, yet full of contradictions underneath.
As we saw in 2024, technology has once again been the market’s golden child. The wave of excitement and billions of dollars flowing into AI have turned the sector into a powerful engine for growth, driving the major indexes higher. Companies tied to AI infrastructure, semiconductors, and data services have captured both headlines and capital, while most other sectors have been flat to modestly positive. It’s been an impressive run, but gains have come mostly from technology. Beneath the surface, the broader economy is showing signs of fatigue.
Tariff headlines, particularly those involving China, have added turbulence and uncertainty. One silver lining, however, is that these pressures are accelerating the build-out of U.S. manufacturing and supply-chain capacity. That’s a long-term positive for the economy, even if the transition is bumpy in the short run.
Another silver lining—literally—has been in the metals market. Gold and silver have both surged and may still have room to run. Metals tend to shine when uncertainty runs high, so this tells us something about where investors are looking for safety.
We also see opportunities overseas. As other economies adapt to shifting trade dynamics, they’re rebuilding supply chains and forming new partnerships, creating fresh sources of growth beyond the U.S. and outside the current AI spotlight. Our portfolios already include international exposure, and in some cases, we’ve been adding to those positions where appropriate.
Interest rates are beginning to ease, which should have a positive effect across the economy. Businesses can invest and hire more freely, while consumers benefit from lower mortgage and loan costs, freeing up money to spend elsewhere. Lower rates should help support growth, but don’t expect smooth sailing. Markets rarely adjust gracefully, and trade realignments tend to create as many bumps as they fix.
Looking ahead, we expect turbulence as global trade continues to reset. If you have a significant short-term purchase planned, like buying a home or funding a large expense, it may be wise to take a few chips off the table to limit short-term volatility. Otherwise, despite market ups and downs, we believe the U.S. remains one of the strongest foundations for long-term investment. It’s resilient, innovative, and adaptable, even when the landscape feels uncertain. And while fluctuations can be uncomfortable, time, not timing, has consistently served investors well.
Warm Regards,
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.