US equity markets extended their rising trend in 2024 and when markets are trending higher, investment success often requires doing less, not more. With the bar now set very high for US stocks, the stage may be set for increased volatility in 2025. 

In the final stretch, worry this election season seemed to be not just about the outcome, but also the process itself. With a decisive outcome wiping this scenario away, “risk on” conditions have quickly returned.

After stressing the system with the longest yield curve inversion in US history, the central planners at the Fed are now attempting to bring the largest pile of debt in world history in for a “soft landing” and the stakes for markets have likely never been higher.

While the fire brigade managed to keep the fallout contained, market action in August revealed the substantial risk hiding in opaque global market linkages that are highly sensitive to changes in monetary policy.

Investors de-risked portfolios in July by closing the popular long Nasdaq / short Russell 200 “pair trade” , leaving the S&P 500 with a gain on the month as sector rotation kept a lid on the VIX and hedge expense in TCM portfolios at a minimum.