Investment Commentary - October 2024
CWM Stock
By Dan Moskowitz, CFP® President and Chief Investment Officer
Q3 Market Snapshot (2025)
U.S stocks posted strong gains in Q3, led by the large-cap / tech-heavy names. The S&P 500 delivered a robust return (better than 8 %) over the quarter as investor optimism about easing monetary policy (lower rates) and continued AI / tech momentum bolstered sentiment. However, the rally was narrow, with much of the upside concentrated in a handful of mega-caps, sparking warnings of overstretched valuations beneath the surface.
The bond market overall also saw gains, with U.S. government bonds returning about 1.5% in Q3, as yields drifted lower—particularly at shorter maturities—as markets began anticipating rate cuts. Credit spreads remain historically tight, reflecting confidence in credit markets despite macro uncertainty.
Economic Outlook
Overall, the U.S. economy is in a mixed but relatively resilient state. The rebound in Q2 shows there’s still underlying strength. The 2nd quarter GDP reading was much stronger than expected, corporate earnings and the consumer also seem to be holding up well.
If I had to bet:
Growth for 2025 will likely land somewhere between 1.5% and 2.0% (below 2024’s pace).
Unemployment might drift upward modestly (to ~4.7%) if job creation remains weak.
The Fed probably cuts interest rates further (two more 25 basis point cuts this year).
What are the risks to our base case scenario? The most obvious are greater damage from tariff’s, higher inflation, geo-political events, and growing concerns over the fiscal condition of the United States balance sheet.
Have we seen this before?
The current frenzy in AI-related investing has strong echo chambers of past technology bubbles. Investors are pouring hundreds of billions of capital into infrastructure, platform plays, chipmakers, and algorithmic tools with high expectations for exponential returns. But with much of the valuation premised on future monetization rather than demonstrated profits, the setup is loaded with speculative risk. This is eerily similar to the late 90’s internet bubble where there were a handful of big winners and many more losers. Narrow leadership, clustering of capital in a few high-fliers, exuberant narratives pushing the crowd in, and less concern over fundamentals in favor of momentum.
Say the line Bart
This Homer Simpson cartoon does a pretty good job of capturing the euphoria around AI. It almost seems like companies are trying to mention AI as many times as possible during conference calls as they know the trading algorithms are looking for just that.
CWM’s Chief Market Strategist, John Lui has written about this numerous times over the prior twelve months. His September 9, 2025 blog speaks to the relative value of dividend paying stocks, “A total return approach (dividends and price appreciation) is the better risk/reward way to invest this late into the crowded price momentum trade.”
Here is the link to John’s September 9th blog:
https://www.chathamwealth.com/blog/mvtjmswh88gidg1lyenmi4c0m76ma2-8trrd-438ag
End of Year Tax Planning
We are in the midst of talking to clients and accountants about realized taxable gains/losses, qualified charitable distributions (QCDs), and other year end items. Please let us know if there is something we can help with. We are always happy to discuss.
Sincerely,
Dan Moskowitz
Disclosure
Chatham Wealth Management is registered as an investment adviser with the SEC. SEC registration does not constitute an endorsement of the firm by the Commission, nor does it indicate that the adviser has attained a particular level of skill or ability.
Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be profitable for a client's portfolio.