2025: Strong Markets, Narrow Leadership, Familiar Lessons
As we enter November, the market has once again delivered strong returns — and once again, it has done so in a way that doesn’t always feel strong.
Pullbacks have come and gone, headlines have been noisy, opinions have been loud, but the broader trend? Upward.
If that sounds familiar, it should.
It’s the same pattern we've seen for nearly two years: resilience, shallow declines, and a handful of dominant companies doing most of the heavy lifting.
It’s easy to declare invincibility when markets grind higher.
It’s harder to zoom out — but that’s exactly when doing so matters most.
Remember: this stretch is coming off a painful reset period in 2022, where many portfolios saw meaningful drawdowns. When you blend the down year and the subsequent climb back, the long-term average still settles near historical norms — closer to “solid and steady” than “unprecedented.”
Strong? Yes.
Unstoppable? Nothing ever is.
A Familiar Market Shape
Just like last year, market leadership in 2025 has been concentrated.
A small group of mega-cap names — many tied to AI, data infrastructure, and platform dominance — have carried disproportionate weight.
They are extraordinary companies. They continue to execute. But when a handful of stocks guide the index, the foundation can feel narrower than price charts imply.
Strip out size weighting and look at the equal-weighted S&P 500, and the story changes. The rally broadens and contracts in phases, but has not matched the enthusiasm seen in the largest companies.
This isn’t a sign of weakness — it’s a reminder of cycles.
Leadership rotates.
Valuations normalize.
Markets eventually broaden.
They always do — just not always on our preferred timeline.
Where Does It Go From Here?
Two realistic outcomes:
Leaders grow into their price
Earnings expand, productivity gains materialize, and the rest of the market plays catch-up.Leadership cools
Prices consolidate or pull back, allowing quality companies outside the top tier to have their turn.
Both paths reward patient investors who own quality.
Trying to guess which week that shift happens? That’s where investors typically get hurt.
Where We See Opportunity
The story of 2025 hasn't just been about the giants.
It has also been about the businesses still quietly compounding — strong balance sheets, repeat-purchase models, durable cash flows, and rational valuations.
Many high-quality names still trade at prices not far from pre-2022 levels — despite improving fundamentals.
Those are the areas where disciplined investors lean in, not chase.
Staying the Course (The Uncomfortable Truth)
The headlines will keep coming.
The noise will stay loud.
Predictions will continue.
But long-term outcomes rarely hinge on short-term narratives.
They come from:
Owning exceptional companies
Avoiding emotional investing
Staying patient during rotations
Letting fundamentals work over time
We don't invest six months at a time.
We invest across cycles — and through cycles.
The discipline doesn’t change just because the calendar does.
This content is for informational purposes only and not investment advice. Investing involves risk, including possible loss of principal. Past performance does not guarantee future results.
