Thank you to everyone who joined Exencial’s quarterly market outlook. This quarter’s discussion focused on how steady economic growth, elevated valuations, and ongoing policy uncertainty are shaping market conditions. Members of the Investment Team shared how these factors are influencing portfolio positioning and risk management.
Chief Investment Officer Tim Courtney opened with a review of economic and market indicators. While some signals, such as a flat yield curve, point to potential weakness, he noted that economic growth remains resilient. Inflation continues to ease but remains above the Federal Reserve’s target, contributing to low consumer sentiment and ongoing affordability challenges. Equity valuations, particularly in U.S. large-cap stocks, remain elevated relative to history, which may limit future returns.¹ U.S. mid- and small-cap stocks continue to trade at discounts, and international equities remain an important component of diversified portfolios.¹ Tim emphasized disciplined diversification and regular rebalancing as key drivers of long-term outcomes.
Senior Portfolio Manager Randy Farina discussed equity positioning and the firm’s valuation-driven investment approach. He highlighted the importance of focusing on long-term cash flows rather than short-term market narratives, particularly in areas such as artificial intelligence, where enthusiasm has pushed valuations higher. The team has remained selective, trimming positions where prices have moved ahead of fundamentals while maintaining exposure to high-quality businesses that are temporarily out of favor. Randy also addressed weakness in certain consumer and healthcare stocks, noting that periods of underperformance are expected when investing with a long-term perspective.
Senior Portfolio Manager Michael Conerly concluded with an overview of fixed income markets. He noted that bond returns in 2025 were among the strongest in recent years, supported by Federal Reserve rate cuts and stable credit conditions.² Looking ahead, he expects yields to remain attractive, with returns driven primarily by income. Given tight corporate spreads, the fixed income team continues to emphasize higher-quality issuers and maintains allocations to Treasuries and Treasury Inflation-Protected Securities to help manage inflation risk. Fixed income remains positioned to provide stability within portfolios.
Overall, the team emphasized a balanced and disciplined approach grounded in diversification, valuation awareness, and long-term fundamentals. In an environment with mixed signals and elevated prices, Exencial remains focused on managing risk while positioning portfolios for durable outcomes.
To watch the full webinar recording, click here.
If you have any questions about market conditions or your investment strategy, please contact your Exencial advisor.
Sources
PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE RETURNS. Information and opinions provided herein reflect the views of the speaker as of the publication date of this webinar. Such views and opinions are subject to change at any point and without notice. Some of the information provided herein was obtained from third-party sources believed to be reliable but such information is not guaranteed to be accurate. In addition, the links provided within are for convenience only and the provision of the links does not imply any sponsorship, endorsement, or approval of any of the content. We do not guarantee the content or its accuracy and completeness. The content is being provided for informational purposes only, and nothing within is, or is intended to constitute, investment, tax, or legal advice or a recommendation to buy or sell any types of securities or investments. The opinions shared in this webinar are based on Exencial's perspective of the current macroeconomic conditions, which are dynamic in nature. The speaker has not taken into account the investment objectives, financial situation, or particular needs of any individual investor. Any forward-looking statements or forecasts are based on assumptions only, and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. Any assumptions and projections displayed are estimates, hypothetical in nature, and meant to serve solely as a guideline. No investment decision should be made based solely on any information provided herein and the speaker is not responsible for the consequences of any decisions or actions taken as a result of information provided in this webinar. There is a risk of loss from an investment in securities, including the risk of total loss of principal, which an investor will need to be prepared to bear. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. Exencial Wealth Advisors, LLC (“EWA”) is an investment adviser registered with the Securities & Exchange Commission (SEC). However, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. EWA may only transact business in those states in which it is registered, notice filed, or qualifies for an exemption or exclusion from registration or notice filing requirements. Complete information about our services and fees is contained in our Form ADV Part 2A (Disclosure Brochure), a copy of which can be obtained at www.adviserinfo.sec.gov or by calling us at 888-478-1971.
Treasury Inflation-Protected Securities (TIPS) are US Treasury bonds indexed to inflation to protect investors from decline in the purchasing power of their money. The principal value of TIPS increases with inflation and decreases with deflation.