Welcome back to Student of the Market, where we break down what’s driving markets and what the numbers are telling us beneath the headlines.
I’m your host, Mark Peterson and today we’re looking at the November 2025 market landscape - a moment when almost everything seems to be working stocks, bonds, even alternatives. But as always, the story beneath the surface is more nuanced - from changing correlations to investor sentiment and the impact of the Federal Reserve’s recent moves. Our goal is to equip you with actionable information to help guide client conversations and portfolio decisions.
:36
So what we’ll cover today
o We’ll look at recent performance across stocks, bonds, and alternatives.
o How correlations with stocks and bonds are shifting.
o Asset class returns for 2025.
o Seasonal patterns in stock returns.
o The current bull market and where we stand.
o Fund flows and investor sentiment.
o Comparing today’s AI-driven rally to the dot-com bubble of the late 1990s, early 2000s.
o The impact of Fed rate cuts on various asset classes.
These topics are designed to help you contextualize recent market moves and anticipate what might be ahead.
1:12
Now, let’s talk stock market seasonality.' Several things we can focus on.
First, U.S. stocks just posted their best May–October stretch since 1950 up +23.6%.
Historically, momentum from strong periods often continues through year-end. Only 1 period was negative which happened to be last year (ran into policy and tariff concerns in early ’25).
Second, the period we are now in, which I return to as “Turkey to Tax' period (because it stars Nov 1 the month of Thanksgiving and ends Apr 30 the month where we normally pay our taxes ) has been the best six months for stocks since 1926, while the opposite six months which I refer to as “Mommies to Mummies' (May 1 is the month of Mother’s Day and of course Oct 31st being Halloween is typically weakest six month stretch. And so, unusual that we had such a strong May 1st to October 31st time period. Traditionally, the market refers to the May 1–October 31 timeframe as “sell in May and go away.' However, if you look at historical data, this six-month stretch has delivered an average return of +3.7%-a respectable gain for that period.
2:42
So we’ve got momentum heading into a historically favorable window. That doesn’t guarantee anything, but it tells us that the market’s rhythm - that cyclical pulse between optimism and caution - is very much alive.
2:57
Stepping ahead looking at this bull market. October marked the three-year anniversary of this bull market. The S&P 500 has doubled in that time - up around 100%.
But here’s some context: the average bull market in history lasts about 74 months and delivers gains of roughly 343%. That means, statistically speaking, this run could still have some room to go.
Of course, bull markets come in all shapes and sizes and don’t die of old age - they usually end because of excess or recession. And right now, we don’t have strong evidence of either.
3:42
Moving on to a hot topic the AI boom, the Artificial Intelligence story and let’s compare it to the .com bubble that we saw in the late 90’s early 2000’s.
Yes, we’ve seen huge enthusiasm around artificial intelligence. And yes, valuations in parts of the market look stretched. But here’s the key difference: during the late 1990s, stock prices ran way ahead of earnings. Profits didn’t come close to supporting the multiples investors were paying.
Over the past four years (roughly), AI sector earnings grew 73% with returns of 94%, compared to 80% earnings growth and 439% returns during the tech bubble.
This suggests a healthier market dynamic and may help advisors address client concerns about “bubble' risks.
4:35
Moving onto equity flows here’s something interesting - despite strong stock market performance, investors have been pulling money out of equity funds this year (both MF and ETFs when you combine them together. YTD thru in September 2025, U.S. equity funds saw outflows of $47 billion.
On the surface, that might sound bearish. But historically, periods of negative flows - when investors are selling - have often preceded strong future returns. It’s what we call a contrarian signal.
Think of it this way: when sentiment turns cautious even as markets rise, it means there’s still skepticism - and that usually leaves room for further upside.
Moving on to the Federal Reserve, which has been at the center of the 2025 narrative.
Historically, when the Fed cuts rates and the economy avoids recessions, stocks have tended to perform well - especially growth and technology names.
In the 12 months following non-recessionary rate cuts, tech stocks returned 37%, growth stocks 26%, and U.S. stocks 22%.
Conversely, rate cuts during recessions have led to negative returns.
So, while some worry this bull market is running out of steam, history tells us that non-recessionary easing tends to fuel - not finish - market rallies.
6:00
Looking at Asset Class returns here in 2025 we’ve seen widespread gains across equities, bonds, and alternatives.
This is one of our favorite charts that some folks asked us to update, looking at all the various fund categories, so MorningStar fund categories, there’s 122 of them now. Only 1 of those categories has lost money year-to-date.
If you look back historically, there have been periods when virtually nothing in a portfolio worked. Most recently, in 2022, 94% of asset classes lost money. Yet in the years that followed-23 and now into 2025-nearly everything has rebounded, with 95% of categories generating positive returns in all those years. This pattern has been repeated after other challenging periods such as 2018, 2008, 1994, when widespread losses were followed by broad-based recoveries.
This broad-based performance highlights the benefits of diversification and the importance of maintaining exposure to multiple asset classes.
7:03
One last slide on diversification, amid this year’s ups and downs earlier this year alternative investments have reminded us how important it is to keep portfolios balanced. Gold has been the best performing asset this year, liquid alternative strategies have also helped smooth returns and added diversification beyond traditional markets. It’s also helpful to remember year’s like 2022 right in the middle, one of only three times since 1926 when both stocks and bonds lost money in the same calendar year. In that kind of environment alternatives were one of the few areas that still delivered positive results, that’s when diversification matters the most and when alternative strategies have shown their true value.
8:20
So where does all this leave us?
2025 has been one of those years when nearly everything worked - stocks, bonds, and alternatives all delivered gains. The bull market appears to be justified. The Fed is cutting, but the economy’s still expanding. And correlations are normalizing, which means diversification matters again
As we head toward 2026, the key will be balance - staying invested but being selective. Because while history doesn’t repeat exactly, it tends to rhyme - and right now, that rhyme sounds optimistic.
Thanks for tuning in to Student of the Market. I’m your host Mark Peterson- and we’ll see you next month.
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