The third quarter of 2025 continued a remarkable year for equities, with the S&P 500 achieving 27 new highs year-to-date. Market strength has persisted despite persistent political division at home, ongoing conflicts abroad, and the impending economic drag from newly imposed tariffs.
Beneath the surface, however, a two-speed economy has become increasingly apparent. The largest ten companies in the S&P 500—many driven by artificial intelligence, digital platforms, and global scale—have delivered outstanding results, while the remaining 490 companies have produced only modest growth. This divergence mirrors broader societal and economic trends: wealth and productivity gains are increasingly concentrated among the largest enterprises and the wealthiest households.
At the same time, the composition of the labor force is changing. Immigration, once a steady source of workforce expansion, has slowed to a trickle, depriving the economy of both skilled and unskilled workers. This shortage has been partially offset by slower hiring, fewer voluntary job quits, and productivity gains derived from technology and automation. The resulting equilibrium—an economy that is producing more with fewer people—has contained wage pressures but also highlighted the challenges of sustaining broad-based growth.
The expectation of lower interest rates, combined with the power of digital transformation and the tailwinds of AI-driven efficiency, has enabled leading corporations to achieve record profits while operating with leaner staffing and lower costs. Meanwhile, consumer spending remains resilient, continuing to serve as the cornerstone of economic activity even as early signs of rising unemployment appear.
Through this complex landscape, well-diversified, conservatively constructed portfolios have participated effectively in the market’s strength while maintaining disciplined control of risk and volatility. History consistently affirms that portfolios grounded in sound fundamentals and broad diversification tend to prosper through both exuberant and uncertain times—steadily navigating the bumps while progressing upward over time.
In this RVW Report:
• Two important videos
• The data in graphics and charts
• Your Financial Biases
• Scam Alert
• The New York Taxi Medallion Bubble
• Major Demographic Trends
• Don’t Fear Buying at a Market Top
• Why we’re not fazed by recessions
ESSENTIAL VIEWING
1. WealthWisdom from Blackstone’s John Gray on the Economy, AI and Where to Invest Now. We are proud of our deep relationship with Blackstone and grateful the investment opportunities they provide for our clients.
Click here watch the video.
2. LifeWisdom meets WealthWisdom as Dimensional Founder and Chairman David Booth sits down with Jake DeKinder. Together, they discuss Booth’s key investment principles and how they apply to everyday situations many of us face.
Click here watch the video.
A PICTURE TELLS A THOUSAND WORDS–AND A CHART TELLS THE STORY
PROFITS ARE STRONG AND GROWING
THE MEGATREND DELIVERING UNPRECEDENTED EFFICIENCIES FOR THE ECONOMY AND PROVIDING AN ATTRACTIVE INVESTMENT OPPORTUNITY INTO NEEDED INFRASTRUCTURE
ECONOMIC ACTIVITY IS GROWING
EQUITIES HAVE PROVED TO BE A RELIABLE INFLATION-INSULATOR AND PROVIDE STRONG REAL GROWTH OVER TIME
HAVING TOO MUCH IN BONDS HAS PROVEN A COSTLY ERROR
THE DECLINE IN THE VALUE OF THE US DOLLAR RESULTS IN FOREIGN EARNINGS OF US BASED COMPANIES BEING TRANSLATED INTO MORE DOLLARS
HERE’S A SNAPSHOT OF THE 2-SPEED ECONOMY
THE U.S. CORPORATE ECONOMY IS GROWING FAR FASTER THAN EUROPE
THE MIXED PICTURE OF EMPLOYMENT
FEWER STOCKS AVAILABLE TENDS TO PUT UPWARD PRESSURE ON THE MARKET
COMPANIES REMOVED FROM THE PUBLIC EQUITY MARKETS
A STRONG SOURCE OF ECONOMIC ACTIVITY
THE CASE FOR DIVERSIFICATION
YOUR BRAIN VS. YOUR WEALTH: UNDERSTANDING AND OVERCOMING FINANCIAL BIASES
Your brain is a powerful survival machine—evolved to detect danger and ensure safety in a world of scarcity. Yet those instincts can sabotage modern financial decisions. The same emotions that once protected us now distort judgment when markets fluctuate. Building wealth requires recognizing these mental traps and creating systems that guard against emotional decision-making.
Investors often feel a tug-of-war between logic and emotion. While traditional investing focused on numbers and forecasts, experience shows emotion often wins—especially when fear or excitement takes hold. Behavioral biases explain much of this response:
1. Loss Aversion – The Pain of Losing
We feel losses more sharply than gains. This drives investors to sell winners too soon, cling to losers, or avoid markets after downturns. Successful investors counter this by focusing on long-term portfolio performance and using rebalancing to stay disciplined through short-term pain.
2. Confirmation Bias – The Comfort of Agreement
People naturally seek information that supports their beliefs while ignoring conflicting data. In investing, this leads to overconfidence and poor diversification. Disciplined investors test their assumptions, seek opposing views, and follow clear sell criteria to avoid being trapped by conviction.
3. Present Bias – The Now vs. Later Trap
We favor immediate gratification over future rewards, undermining saving and investing. Automation helps overcome this: automatic contributions turn good intentions into consistent action, linking present habits to future goals.
4. Anchoring Bias – The Grip of the First Number
Investors fixate on irrelevant reference points, like a stock’s original purchase price. This prevents rational choices when fundamentals change. Wise investors focus on future potential and opportunity cost—not sunk costs.
5. Overconfidence Bias – The Illusion of Control
Overestimating one’s skill leads to excessive trading and poor performance. The best investors maintain humility, diversify broadly, and stick to systematic strategies that prioritize long-term consistency over short-term bets.
6. Building a Financial Immune System
Awareness alone isn’t enough; structure is essential. Automated plans, preset rules, and regular reviews act as a financial immune system—protecting against emotion and ensuring steady, evidence-based progress toward lasting wealth.
PROTECTING YOURSELF FROM SENIOR FINANCIAL SCAMS
In recent years, financial scams targeting seniors have become alarmingly widespread. Fraudsters use increasingly sophisticated methods—often impersonating trusted institutions—to deceive even the most careful investors. Awareness is the first line of defense.
Common Scam Tactics
1. Impersonation Scams – Fraudsters pose as representatives from the IRS, Social Security Administration, or your financial institution, demanding immediate payment or personal information.
2. Tech Support Scams – Callers claim your computer or phone has a virus and request remote access or payment to “fix” it.
3. Romance or Caregiver Scams – Scammers build emotional connections, then request money for “emergencies” or personal needs.
4. Investment and Lottery Scams – Offers that promise guaranteed returns or prizes requiring upfront “fees” are red flags.
How to Protect Yourself
• Be Skeptical of Calls or Emails – The IRS and legitimate financial institutions never demand payment or personal details over the phone or email.
• Never Click Unverified Links – Phishing emails often appear authentic. Always access your bank or brokerage account through verified websites or apps.
• Use Multi-Factor Authentication (MFA) – This adds an extra layer of protection beyond your password.
• Monitor Your Accounts Regularly – Check for unfamiliar transactions and report suspicious activity immediately.
• Freeze Your Credit – If you’re not applying for new credit, a freeze helps prevent identity thieves from opening accounts in your name.
• Discuss with Trusted Advisors – Before sending money or sharing sensitive information, consult a family member, CPA, or financial advisor.
THE NEW YORK TAXI MEDALLION BUBBLE
The price for medallions dropped from $1 million to $200,000.
The taxi medallion crisis began in 2004 during the Bloomberg administration when cab drivers across the City were lured into purchasing medallions by alluring ads placed strategically in immigrant newspapers that promised drivers a way to buy into the American dream. The fliers read: “Do you want to own a piece of New York?”
Yellow Cabs Were a Path to a Middle Class Life
In 2019, a bombshell New York Times investigation exposed a City-sponsored scheme to raise municipal revenue by artificially inflating the value of medallions by over 500 percent. The City also manipulated public medallion price data. By 2014, the City was able to inflate the price of medallions to over $1 million and had made nearly $855 million off the backs of the mostly immigrant workforce.
The crash starting in 2014 is almost universally described as the “Uber effect,” and it certainly makes sense that the growth of Uber would make the value of a yellow cab decline. But if you look more closely, the real question is different: why did prices for medallions go up in the first place? Between 2002 and 2014 the population of New York City didn’t grow much; the number of medallions didn’t change appreciably; and the average income from driving a cab didn’t go up. So why would the price of a medallion quintuple? According to the Times, the answer is corruption.
THE MAJOR DEMOGRAPHIC TRENDS REFLECTING OUR CHANGING SOCIETY
FEWER BIRTHS
THE IMPACT OF SOCIAL MEDIA
PEOPLE ARE BECOMING LESS RELIGIOUS
REDUCED SEXUAL ACTIVITY
THE DRIVERLESS TRANSFORMATION IS UNDER WAY
BUYING AT THE TOP ISN’T ALWAYS A MISTAKE
Many investors worry about “buying at the top.” The concern is natural, but history shows that so-called tops are often followed by higher ground.
So far in 2025, the S&P 500 has already hit 27 new highs. Each of those days was technically a “top,” yet each was soon surpassed by another. This pattern is not unusual.
• 2013: The S&P 500 reached 45 all-time highs as markets recovered from the financial crisis. Within two years, it was up another 25%.
• 2017: Investors saw 62 record closes—the second-most ever in one year. The index gained more than 20% that year and kept rising in 2018 and 2019.
• 2021: The market notched 70 new highs, setting records even after a pandemic-induced recession. Investors who stayed invested participated in another strong year of gains.
The takeaway: buying at a “top” often means joining an ongoing trend. Over time, markets reflect innovation, earnings growth, and productivity, not short-term noise. Pullbacks are temporary; new highs are part of long-term progress.
The real risk isn’t investing at a high—it’s staying out and missing the power of compounding. Yet when markets surge, investors often hesitate, facing a “psychological barrier” to entry. Paying record prices feels risky, but this thinking is rooted in market timing, which almost no one gets right.
Since 1950, the U.S. equity market has reached 1,250 all-time highs—about 16 per year—on its steady climb upward. Avoiding those moments would have meant missing decades of growth.
S&P 500 all-time highs by decade
What do market highs mean for investors?
New market highs aren’t as significant as they seem. They typically reflect ongoing economic growth, rising corporate profits, and gains in productivity and innovation. While slowdowns happen, long-term progress has consistently driven markets to new records—rewarding investors who stay invested.
Even if you had invested only at all-time highs in the S&P 500 from 1950–2023, your returns would have been close to the index average over one-, two-, and three-year periods—even through major downturns like Black Monday (1987), the Tech Wreck (2000s), and the 2008 financial crisis.
Despite this, many investors still hesitate when markets are near records, preferring to hold cash and “wait for a correction.” Yet significant pullbacks often never arrive—leaving those on the sidelines missing out on the very returns they hoped to capture.
How often does a big correction follow a market high?
For long-term investors uneasy about buying near record levels, history offers reassurance. Market corrections following all-time highs have been surprisingly rare. Data on the 1,250+ S&P 500 highs since 1950 show how seldom the index has ended down more than 10% over subsequent periods.
How frequent are market corrections following all-time highs?
Key takeaways:
• Looking out just one year from each all-time high in the S&P 500, market corrections greater than 10% have occurred only 9% of the time.
• As we extend the time horizon, market corrections become even rarer. In fact, the S&P 500 has never been down by more than 10% at the end of a 10-year period following any of its all-time highs since 1950.
• Long-term investors have the advantage of an extended time horizon. Staying invested can help them stick to their financial plan.
Time Provides Perspective for Long-Term Investors
There’s no way of knowing what lies ahead in the near term. What history tells us is that stocks tend to move higher over the long term. New highs are a normal occurrence and don’t necessarily warn of an impending correction. They may in fact signal that further growth lies ahead.
Stock Performance in Every Recession Since 1980
Being an investor during a recession is scary — but there’s good news for long term investors.
Key Points:
• History is on the investors’ side. The S&P 500 and NASDAQ have recovered to pre-recession levels following every recession.
• Since 2000, the S&P 500 has taken an average of 647 trading days to recover after a recession. The NASDAQ takes 330 days on average.
• Since 2000, the S&P 500 fell an average of 18.58% over the entire course of a recession, while the NASDAQ fell 14.48%.
With heightened economic uncertainty, many are wondering whether the United States will enter into a recession in the near future – and what that might mean for their investments and stock market strategy.
To better understand how the market has done during previous recessions and how it has recovered after, we looked at how the S&P 500 and NASDAQ performed during every recession since 1980.
Unsurprisingly, stocks suffered during recent recessions. But they always recovered and surpassed their pre-recession levels.
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NOTE: The information provided above and attached is not complete, may be erroneous, and omits important data. The charts are estimates and may contain inaccuracies or distortions. The information presents hypothetical examples and outcomes which may not be accurate and may not recur.
Read and rely exclusively on actual offering documents and on statements received directly from your custodian.
The attached report highlights aspects of your investments, but is incomplete and may be inaccurate. No decision should be made, or action taken based on it. Advice not provided in writing cannot be relied upon. Investments are not guaranteed and may lose value. Past performance is not indicative of likely future returns.