To our clients and investors,

Our team recently completed our quarterly investment strategy review. As part of this process, we met with external partners at PIMCO, Fidelity Investments, and T. Rowe Price, and conducted an internal assessment of the funds and strategies currently used in our client portfolios. Below are a few key takeaways as we enter the final stretch of 2025.

AI-related investments continue to dominate all the headlines. Stock prices for many of the “hyperscaler” technology companies are swinging wildly on press releases and lofty projections, often with less attention paid to fundamentals and profitability. While that corner of the market captures most of the spotlight, we continue to see many other areas priced fairly, and in some cases attractively. International markets have quietly outpaced the U.S. this year, and a broader mix of asset classes—from commodities to bonds—have contributed positively to returns.

Dive Deeper (Article): Darwin & Diversification

In fixed income, the Federal Reserve remains the main event. With a rate cut in September and another at their October meeting, policy is clearly shifting toward accommodation. For fixed income investors, lower rates have a two-sided effect: they support prices of existing bond holdings but also reduce the yields available on short-term savings vehicles like money markets. We are watching duration risk closely while maintaining flexibility as conditions evolve. In environments like this, we are prioritizing credit quality rather than reaching for every last dollar of potential yield.

Volatility has been a regular companion for investors this year. From the “Liberation Day” selloff in April to the rapid recovery that followed and now renewed concerns around the credit markets and the potential for an A.I. “bubble”, investor sentiment has shifted quickly. As we’ve written about many times, complacency can turn to panic and back again in a matter of days. We view that as part of the natural rhythm of markets—not something to fear. Volatility is a feature of financial markets, not a bug.

Dive Deeper (Article): Complacency to Panic

Our focus remains unchanged: positioning portfolios and household balance sheets for long-term compounding while maintaining short-term flexibility and resilience. Headlines will continue to offer plenty of reasons for caution through the end of the year. History teaches us that entirely new opportunities and risks will emerge quickly. Our framework allows us to allocate capital thoughtfully, and we remain relentlessly focused on what we can control.

In an environment where pessimism is louder than ever and patience is quiet; we remain confident that pragmatic and optimistic investors are the ones who ultimately get rewarded in the long run. We appreciate your continued trust and partnership. As always, please reach out to any member of our team with questions.

Disclosure: It is important to remember that investments in securities involve risk, including the potential loss of principal invested. Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against loss in a declining financial market. Alliance also does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party mentioned in this communication and takes no responsibility. Federal taxes; states may differ. This is not intended to be individual tax advice. Please consult your tax professional. Additional disclosures can be found by visiting alliancewealthadvisors.com/legal-disclosures.