As we enter the fourth quarter, investors face important questions: How do I make my cash productive, with rates low in Europe and now falling in the US? Where are the best opportunities for growth, with many assets trading at record highs? How can I build resilience and manage risk in a changing environment? This outlook lays out practical steps which we believe can help investors protect and grow wealth in today's market.
What happened?
What happened?
Staying invested has paid off
The third quarter demonstrated the value of staying invested. Equity markets ground higher, with the US’s S&P 500, Switzerland’s SMI, Europe’s Stoxx 600, and China’s CSI 300 delivering total returns of 13.3%, 7.1%, 12.5%, and 16.9%, respectively. Bonds and credit delivered solid performance, while gold prices surged—with prices rising as high as USD 3,708/oz. The US dollar was broadly stable after a weak first half.
A shift in monetary policy
The Federal Reserve’s first rate cut since December 2024 signals the resumption of the rate-cutting cycle, in our view. While inflation is likely to rise in the short term, we believe the Fed will respond to signs of weakness in the US labor market with three cuts of 25bps between now and the first quarter of 2026.
Still decent economic growth
The US labor market is cooling. But other indicators remain resilient, and we do not expect a recession. Europe continues to struggle with muted growth and political strains, though lower energy prices and the effect of European Central Bank easing should provide some offset. China’s recovery is uneven, with property weakness and subdued consumer confidence weighing on the broader picture.
How to invest and plan ahead
How to invest and plan ahead
Explore our top investment ideas to help you navigate second half of 2025
Want to learn more?
Want to learn more?
Download our 4Q25 outlook
