Top Fund Manager's "Cloudy" Outlook For 2025 | Jan van Eck

A Wall Street bull turns cautious

I often emphasize that the most useful people to interview are asset managers.

Because they don't have the luxury of merely having an opinion on the road ahead -- they have to commit capital to their convictions, and be judged upon the results.

Today we have the great fortune of having the return appearance of one of the most respected capital allocators in the business: Jan van Eck

Jan is CEO of vanEck, an asset management firm with over $100 billion in assets under management invested across its wide family of ETFs and funds, spanning equity, bond, commodity, digital and regional asset classes.

As we've done the past two quarters, Jan and I spent an hour discussing his latest macro and market outlooks, as well as where he sees the biggest opportunities for investors right now.

[For premium subscribers: Jan’s charts are provided to below in my Adam’s Notes recap]

To hear Jan’s detailed outlook, click here or on the video below:

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Adam’s Notes: Jan van Eck (recorded 12.12.24)

EXECUTIVE SUMMARY:

• Inflation continues to be a significant concern for U.S. financial markets, driven by persistently high services inflation at 5% annually. Despite goods inflation declining year-over-year, wages and service costs remain elevated. Sticky inflation poses risks of sustained high interest rates, which could weigh heavily on both equity and bond markets, particularly as the Federal Reserve maintains its “higher for longer” stance on rates.

• U.S. equity markets are at historically high valuations, with price-to-earnings (P/E) ratios stretched. Major strategists predict modest annual returns of approximately 5% over the next decade, far below recent years' performance. The high valuations leave markets particularly exposed to corrections, especially if inflation or interest rates rise unexpectedly, acting as a “bullet” to market enthusiasm.

• Following two consecutive years of 25% returns in U.S. equities, 2025 is forecast to deliver lackluster returns, with flat or slightly negative performance likely. Earnings growth of 10% could be offset by declining P/E ratios, leaving investors disappointed compared to prior years. A mild market correction of around 10% is possible, though not a crash. This "dud year" highlights the need for careful risk management and diversification.

• U.S. equities' rich valuations are prompting a shift toward