Copy of Tactical Changes September 2025

Stock indexes continue to set new highs, even as prices stretch to unprecedented levels. Valuations may be sky high, but investor worries about this remain relatively low. A recent Bank of America survey revealed that over 90% of institutional investors view U.S. equities as too expensive, yet they are nearly fully invested with cash levels near multi-decade lows. This disconnect isn’t new, and history shows it can last for extended periods of time. Bull markets typically last four to five years, and with the current one nearing its third birthday, there could still be further upside potential. Helping sustain the trend is solid earnings growth, with S&P 500 companies reporting more than 10% year-over-year gains, largely fueled by tech sector megacaps.

Despite lackluster economic data, most notably the record downward revision in payrolls, markets barely registered a ripple, perhaps interpreting the data as raising the odds of Fed rate cuts. At the same time, productivity gains from AI and other technology suggest that a softer labor market doesn’t necessarily curtail corporate earnings. While inflation remains tolerable, the economic environment could be strong enough to support growth.

Against this backdrop, there is one tactical change in Provizr portfolios that employ the Sector Equity rotation. Consumer Discretionary earns the spot for the first time since March, when tariff policies moved to the forefront, replacing Utilities.

Alan Brilliant

Co-Founder, Provizr

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