September 2025 Investment Update
Strategic Positioning
Staying Disciplined Amid Shifting Trends
September is a month of transitions, kids head back to school, football season kicks off, and routines start to feel a little more grounded again. It’s also a reminder that preparation matters. Just as students sharpen pencils and athletes review their playbooks, our investment team stays disciplined and prepared for whatever the next quarter brings. That preparation and long-term focus are what help keep your financial plan on track, no matter the headlines.
Market Recap
Importantly, in August this discipline paid off: while the S&P 500 gained +3.1%, the sectors where we are currently overweight, small caps, healthcare, materials, and biotech, all delivered stronger returns, ranging from +4.8% to +5.8%.
August delivered another month of strength across the U.S. markets, with broad indices trending higher:
- S&P 500: +3.1%
- Nasdaq Composite: +3.6%
- Dow Jones Industrial Average: +2.8%
(Source: Market News, August 31, 2025)
Several of the areas where our portfolios are overweight outperformed the broader market by a wide margin:
- Small-cap stocks: +5.57%
- Healthcare: +4.79%
- Materials: +5.71%
- Biotech: +5.79%
This divergence highlights the benefit of maintaining intentional exposure to sectors showing stronger momentum relative to the broader market.
Contributing Factors
Several themes shaped market direction in August:
Federal Reserve Pause
The Fed chose to keep interest rates steady, signaling patience as inflation continues to cool. Investors largely interpreted this as supportive for equities.
Sector Rotation
Capital continued flowing into cyclical and undervalued sectors such as small caps and materials.
Housing Slowdown
On the flip side, national real estate data continues to show weakness, with rising inventory and affordability challenges weighing on home prices in many regions.
While past performance is not indicative of future results, these developments created opportunities for the areas where we are already positioned with an overweight.
Portfolio Positioning: Focus on Small Caps, Materials, and Healthcare
Core Allocations - No Change
- Diversified large-cap U.S. equities
- Small-cap U.S. equities
- Fixed income tailored to your risk profile
Areas of Emphasis
Small caps, materials, healthcare, and biotech, all of which outperformed the broader market in August.
These allocations reflect both our conviction in their long-term growth prospects and the attractive valuations relative to other areas of the market.
Note: Asset allocation and diversification do not guarantee a profit or protect against loss in declining markets. All investments involve risk, including the potential loss of principal.
Looking Ahead
As we move into September, we remain watchful of two crosscurrents:
- The Federal Reserve’s path forward, which will continue to shape sentiment across equity and fixed income markets.
- The real estate sector’s drag on broader economic growth, which bears monitoring as we head into year-end.
Our investment team will continue to evaluate data and trends carefully, making adjustments as needed while keeping your long-term financial goals at the center of every decision.
Your financial goals remain our priority. If you’d like to review your portfolio or talk through current market conditions, please don’t hesitate to reach out to your advisor. Thank you for the trust you place in our team.
Important Disclosures
This communication is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Strategic Advisory Partners (“SAP”) is a registered investment advisor. Registration does not imply a certain level of skill or training.
Past performance is not indicative of future results. No investment strategy, including trend following, can guarantee profits or protect against losses. Market indices mentioned are unmanaged and cannot be invested in directly. Index performance does not reflect transaction costs, fees, or expenses.
Forward-looking statements, including projections of market performance, earnings growth, Federal Reserve actions, and economic conditions, are based on various assumptions and beliefs that may not prove to be accurate. These statements should not be relied upon for making investment decisions.
Investment decisions should be based on an individual’s own goals, time horizon, and risk tolerance. Diversification and asset allocation do not ensure a profit or protect against loss.
This material has been prepared from sources believed to be reliable but is not guaranteed as to accuracy or completeness. This information may change at any time based on market or other conditions.
©2025 Strategic Advisory Partners. All rights reserved.
