• Overall, we are just two months into 2025, and already some notable trends are appearing in the markets. These include 1) the broadening of stock-market leadership beyond U.S. mega-cap technology, 2) the stabilization of government bond yields, and 3) European equities showing signs of life after underperforming.
  
  For those investors with diversified portfolios, these will all likely be welcome developments. For example, for investors in the U.S. equity market, having both large-cap and mid-cap stocks across both growth and value sectors could help mitigate the uncertainty around mega-cap technology in the near term. Similarly, having some allocations to investment-grade bonds and international equities would provide exposure to the second two trends as they emerge this year. Thus, the theme of diversification, we believe, remains a critical one in the year ahead.
  
  More broadly, after two strong years in markets with low volatility, we would expect market returns to moderate and volatility to increase – but for long-term investors, any pullbacks could be viewed as opportunities to rebalance and diversify portfolios across sectors, regions and asset classes. Given we don't yet see the scope for a downturn or recession, or Federal Reserve rate hikes, market corrections may still come in the context of an ongoing, albeit aging, bull market.
  
  

  

• Final Words: Markets are at the all time high and fed is cutting interest rate, caution warranted. Below is CNN Greed vs Fear Index, pointing at 'Neutral'.
  
  

  

  Below is last week sector performance report.
  
  

  

If you are looking for investment opportunities, you can take a look at our Hidden Gems section, and if you want to see our past performance, visit our Past Performance section. If you are looking for safe and low cost Exchange Traded funds(ETFs), check out our ETF recommendations.

Currrent Shiller PE (see below) is showing overbought conditions as index is far above mean/media and our AryaFin engine is indicating caution. Have a good weekend.