Tactical Changes August 2025

Hello Friends!

The past month brought a wave of economic news, both encouraging and concerning, yet markets remain near record highs and continue to brush off investor worries. Inflation has picked up and labor market data has weakened, but corporate earnings have stayed strong, and liquidity remains plentiful. Even surprise tariff announcements and the firing of the Bureau of Labor Statistics commissioner had little lasting impact. Whether this strength reflects genuine economic momentum or abundant liquidity, the prevailing trend is still bullish, and momentum remains the clearest guide for investors.

The Federal Reserve is effectively on pause, caught between rising prices and softening employment data. Which risk will ultimately take precedence is still unfolding. A 1970s-style stagflation scenario remains a low-probability outcome, but it is a risk worth monitoring. Tariffs remain a central pillar of the administration’s economic strategy, although their long-term impact is still uncertain and will likely produce both winners and losers.

Within Provizr portfolios, one tactical change was made in August. In the Specialty Bond rotation, we shifted from Foreign Bonds to High-Yield Bonds. This reflects the continued strength in risk appetite and our view that credit markets remain well-supported.

Alan Brilliant

Co-Founder, Provizr

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