2025: Round One
The Boodle Blog – February 2025
The year ahead
Hello everyone, and welcome to the February 2025 edition of the Boodle blog! If you’re a returning member, welcome back! If you’re new to boodle, we thank you for taking this journey with us! At boodle, we believe that the person best able to manage your money is you, and we serve as your guide to the fruitful journey of financial literacy. There is a lot of financial news to share with you, so let’s let right to it.
We will start first with the transfer of power at 1600 Pennsylvania Avenue as the nation say’s goodbye to the Biden administration and welcome back to the Trump administration.
On January 20th, President Trump issued his first Executive Orders and among the very first was a hiring freeze on federal workers. Later the Trump administration offered job buyouts to more than 2 million federal employees. These employees have until mid-February to decide if they want to accept this offer.
Love him or hate him, Trump is doing exactly what he promised to voters, and he is fulfilling his promises at breakneck speed.
As boodle goes to press on late Friday afternoon, word just came out that the Trump administration will impose tariffs on 3 major trading partners – China, Canada, and Mexico with the promise of more biting tariffs to come.
When this news leaked out late Friday afternoon, stock investors panicked and the early Friday gains vanished and the market ended the day on the down side. With so much going on in the economy, we thought that we would touch on 3 or 4 indicators of how the market might do for our Boodle investors.
The Federal Reserve
On January 29th the Federal Reserve announced that they would leave interest rates unchanged, citing the fact that inflation, although it has come down, still remains elevated in spite of the previous rate cuts. We at Boodle were hoping for an additional quarter-point cut, but we do recall that fairly substantial half-point cut that the Fed took last year, and so we will continue to monitor the Fed for
any changes in rate direction. This pause should not affect our secular view of the market.
The Trump Whitehouse
President Trump as we stated above is moving at breakneck speed in many directions, we will discuss a few of those directions here. The President has nominated some very controversial picks for his cabinet,
and so far, he seems to be getting the cabinet members that he nominated. Trump got his Secretary of Defense and his Secretary of State and several others. Perhaps the two that may prove hard to win confirmation may be Robert F. Kennedy Jr. & former congresswoman Tulsi Gabbard. Beyond these cabinet choices, the Trump administration have started to deport illegal aliens that have been in the country. Trump has promised to round these people up and send them back to their own countries, and so far, he is making good on his word.
The Democrat Party
Meanwhile, the DNC seems to be a party without a leader. Once the Biden administration turned over the keys to the incoming administration, the democrats assumed the role of the underdog party. We will wait and see who they choose to take the helm of the party. We see many cracks & fractures in the democrat party, and it will not be a simple task for them to gain their political footing anytime soon, in our opinion.
War Conflicts
Days before he was sworn in as President, Trump declared that he wanted to see an end to the Middle-East war between Israel & Hamas. Trump promised “grave consequences” to the warring parties should that war be raging upon his re-entering the Whitehouse. Sure enough, the two warring parties agreed to a halt in hostilities and hostages on both sides were returned. Boodle sees this as a positive event, and we would like to see Russia & Ukraine end their war in a similar fashion.
The U.S. economy
Many forecasts are calling for continued growth in the U.S. economy. GDP growth has been estimated to grow at a 2.0% annual rate, with some economist a bit more bullish, predicting a 2.5% growth rate.
Having been watching the economy & the stock market now for 27 years, Boodle believes that the economy will experience several economic jolts like the one that President Trump just delivered by his tariff plan on 3 of our biggest trading partners. The unemployment rate will be managed well by the Fed in our view, while interest rates might prove to be tough to reign in as witnessed by the Fed’s position to pause its rate cut plans.
The U.S. Stock Market
The U.S. stock market turned in a stellar performance in 2024. Boodle gave excellent market direction performance in our blog pages, and we want to congratulate all of our members that followed our opinion and were able to capture the 23.3% of return from last year’s market! This information is invaluable to our clients and this is why our members recommend Boodle to their friends, family, and co-workers. We do our best to remove the guesswork from your investment strategy.
What to expect in 2025
The election of Donald Trump back into the Whitehouse brings with him a ton of uncertainty for stock market investors. Trump is known for his unorthodox, combative style which stands in sharp contrast to the previous occupant, Joe Biden. Boodle believes that we will see sharp twist & turns as in previous years, but we suspect the jolts to be a tad more servere than we’re used to. Our forecast calls for more gains, however we aren’t predicting double-digit returns like in 2024. We remain cautious for 2025 and would consider a 13% to 17% return very respectable. Keep in mind that the political gloves are off, and we expect to see plenty of bare-knuckeled brawls for 2025. Buckle up, and stay with Boodle! We look forward to seeing you back here in March, until then enjoy your February.