June 25, 2025
3
min read
💬 Daily Observation
“Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.” — Benjamin Graham
Many investors evaluate success by comparing returns to a peer group instead of following a strategy built around their personal goals. Chasing relative performance can prompt abrupt portfolio shifts at inopportune times—and expose investors to risks beyond their own comfort levels.
One portfolio manager* shifted focus from peer comparisons to a customized rule set: quarterly rebalances, automatic contributions scaled to income, and clear stop-loss thresholds aligned with her own comfort zone. Freed from the noise of “market must-haves,” her portfolio achieved steadier growth and she regained confidence in her process—no flashy calls, just disciplined execution.
Self-control is a strategic asset. By defining—and adhering to—personal investment rules, an investor minimizes emotional deviations, captures compounding more reliably, and keeps the spotlight on genuine goals rather than on beating an ever-moving target.
Are you playing your own game—or someone else’s?
☕ So grab your coffee, and let’s dive in today’s fresh edition of Diversification Daily.
🗞️ Today's stories that matter (and why)
1. 🏦 Fed Rate-cut Odds Rise as Oil Prices Slip
As the Israel-Iran ceasefire held, US crude tumbled back to around $65 a barrel, easing inflation fears, while Fed futures now fully price in a quarter-point cut by the September policy meeting. Markets also digested dovish remarks from regional Fed officials and a sharp drop in consumer confidence, lifting Treasury futures and equity indexes alike.
Why it matters: Shifting rate-cut expectations reshape bond yields and equity valuations, underscoring the interplay between energy prices and monetary policy.
Assets in focus: Fixed Income
2. 🚗 US Vehicle Sales Seen Rising 2.5% in June
J.D. Power and GlobalData forecast U.S. new‐vehicle sales will climb 2.5% to 1.25 million units in June, driven by strong incentives and resilient consumer demand for SUVs and electric models.
Why it matters: Auto sector inventories and production plans hinge on this pace; a surprise upside could bolster factory output and lift related stocks, while a miss might signal cooling consumer spending.
Assets in focus: Equities
3. 🏠 Home Sellers Outnumber Buyers in Historic Imbalance
The US housing market is tilting sharply in favor of buyers, with sellers outnumbering buyers by 33.7%—the largest gap since 2013. This imbalance has prompted Redfin to forecast a 1% decline in national home prices by December 2025. The S&P CoreLogic Case-Shiller 20-City Index fell 0.3% month-over-month in April, underscoring softening price momentum.
Why it matters: Buyers now wield greater negotiating power—expect more price cuts and seller concessions—while homebuilders, mortgage lenders and real-estate REITs could face margin pressure if prices continue to cool.
Assets in focus: Real Estate
4. 📈 Long-term Bond Funds Log Largest Inflows in Two Years
Morningstar data show US long-term bond funds drew $7.4 billion in May—their biggest monthly inflow since early 2023—as investors sought yield amid tariff, inflation and fiscal-deficit concerns. The reversal of April’s outflows highlights renewed confidence in fixed-income before anticipated rate cuts.
Why it matters: Fund flows drive price moves and liquidity in the bond market, influencing both yields and hedge strategies.
Assets in focus: Fixed Income
5. 🛡️ NATO Backs 5% GDP Defense-spending Pledge
At a one-day summit in The Hague, NATO members agreed to raise defence budgets to 5% of GDP and reaffirmed mutual-defence commitments, in a summit tailored for President Trump’s demands. Allies also sought to underscore unity amid Middle East tensions and rising great-power competition.
Why it matters: Higher defence outlays will shape fiscal profiles and drive demand for aerospace-and-defence equities, while geopolitical cohesion can ease risk premia.
Assets in focus: Equities
🌀 Diversification Score – Have you evaluated your portfolio's diversification?
Are you spread across the right risk factors—or leaning on just a few big bets?
📊 Market Movements Snapshot
Asset Classes:
- 🟢 Developed Markets Equities: +15.20% YTD. A rally driven by easing geopolitical tensions and dovish central-bank signals lifted global stocks. Improved liquidity conditions and a softer dollar spurred fresh capital flows into equities.
- 🟢 International Bonds: +1.87% YTD. Falling government yields boosted bond valuations as investors chased stable income. Heightened policy uncertainty further fueled demand for high-quality sovereign debt.
For the full list, click here
Sectors:
- 🟢 Utilities: +8.71% YTD. Yield-rich, defensive utilities drew buyers anticipating future rate cuts and reliable cash flows. The sector outperformed amid broader market swings.
- 🔴 Energy: -0.04% YTD. Oil price headwinds and diminished supply-risk premiums left the sector essentially flat. Capital rotated into growth and defensive names, weighing on energy shares.
For the full list, click here
🤯 Alternative investment highlight: Longevity Bonds: Human Lifespans Hit the Market 🧬
AIR Asset Management, founded in 2018 by insurance-industry veterans, has upended longevity investing by packaging life insurance policies into a closed-end fund—AIR Genesis Fund LP—seeded with $229 million of assets to date for institutional investors.
The fund acquires existing whole-life and universal-life policies from seniors seeking liquidity, then handles medical underwriting, premium payments, and eventual death-benefit collection—offering a low-correlation asset driven by actuarial science rather than market cycles.
By securitizing $229 million of policy face amounts into limited-partnership units—and with 44 % of institutional allocators planning to boost life-settlement allocations in 2025—AIR Genesis Fund demonstrates how human lifespans can be commoditized and traded like bonds, opening the longevity asset class to a broader set of investors.
🧠 From the Education Center: Diversification, a Practical Guide
Diversification is powerful—but only when it’s done right. Learn how to spread risk smartly across assets, geographies, and time.
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*For compliance reasons, these stories are complete fiction with made up characters and portfolios. Possibly influenced by real interactions, and definitely not financial advice."