2025 Q3 McGowanGroup Wealth Management Client Updates
The First Half of 2025
Administration Tariff Chaos, Inflations Concerns & Current High Economic Growth
Reasonable investor concerns regarding current chaotic administration tariff policies include higher prices, inflation, disruption of positive economic activity & Recession. However, inflation is near four year lows with May’s Personal Consumption Expenditures, The Federal Reserve’s preferred inflation gauge, coming in at 2.3%. In addition, The Atlanta Federal Reserve’s Real GDPNow number estimates Q2 2025 Gross Domestic Product (GDP) at 2.9% as of June 27th, 2025.
Brief Bear Markets and Tactical Allocations
This past April delivered the official definition of a Bear Market as the S&P 500 Index reached a 20% decline from its Q1 2025 peak. Yet, a recovery driven largely by unexpected lower inflation, higher growth, and artificial intelligence optimism drove the S&P 500 back to near all-time highs at the time of this writing. During the declines, McGowanGroup deployed accumulated tactical safety, dry gun powder, to add attractive, high dividend, blue chip holdings that currently have our portfolios tracking above our targets for the year so far.
The Second Half of 2025 and 2026
Expected Profit Growth
The most current S&P 500 consensus analyst estimates for profit growth are 9% between now and the end of 2025 plus another 16% for 2026. This potentially means a full 27% growth between now and the beginning of 2027!
Energy and Artificial Intelligence
The recent rally in U.S. equity indexes was driven, in part, by rapid recovery in Artificial Intelligence (AI) related companies. The AI revolution is already increasing productivity and profitability for many companies similar the roaring 1990’s PC/Internet driven boom.
Data center expansion is likely the first phase of capabilities to improve efficiency. The initial wave of upgrades delivered attractive growth for the AI technology supply chain. The resulting increases in electricity demand have led to rallies in the Utilities Sector, Nuclear, and Natural Gas.
Energy Infrastructure
The recent Middle East escalation naturally leads investors to a logical premise based upon the past: Oil prices spike and stocks decline due to the flare of instability in the region. The “12-day conflict” left Iran weakened, but their oil exportation facilities intact. Oil briefly spiked and then just as quickly retreated as the equity markets recovered during late June.
Pipelines: Rising dividends and stock buybacks underscore attractive opportunities for investors. Deregulation possibly leads to increased business productivity and profit growth. Liquid natural gas export capacity is on track to double by the end of 2028 according to the U.S. Energy Information Administration. Currently, the pipelines and export facilities still appear underpriced relative to other sectors. In our estimations, Data Center electricity demand is an obvious choice for natural gas power generation.
The Federal Reserve, High Yield Bonds, and Bond Market Impacts
The Federal Reserve (The Fed) echoed the premise above with concerns on tariff inflation and so far has declined to cut interest rates during the first half of 2025. However, with inflation currently near four year lows, and the Federal Funds rate high, the Federal Reserve’s recent projections indicate rate cuts probable during the 2025 and 2026. The Fed’s interest rate cuts tend to provide a potential limit to downside movements in asset prices because of increased future values of discounted cash flows.
Global High Yield Bond fund prices and Floating Rate Loan funds remained resilient during the long rate spike with a current overall yield near 8%. Premium prices could result in gain harvesting to increase “dry gun powder” for bargains in other areas of the markets. The higher, longer yields likely create more choices in other parts of the bond market like Tax Free Municipals. Meaningful deficit reduction could result eventually in lower long-term rates and potential gains in longer duration bonds.
Our Next Steps
The McGowanGroup Investment Committee (IC) meets each Wednesday morning to review and upgrade the model portfolios using an impressive, evolving, research process. Equity market rallies provide investors the opportunity to raise Tactical Safety for future resilience especially as valuation targets and underperformers are harvested systemically. Pullbacks in market values for equity provides the opportunity to add high cash flow assets at attractive prices.
Our efforts to raise Tactical Safety during rallies allows the IC to allocate to great cash flowing assets in the next correction, gaining potential advantages for the long term.
Summer Planning Season!
“It’s better to start with a plan than end in a panic.”
During our summer client reviews, our Wealth Managers are happy to share McGowanGroup’s updates to our Tax & Estate Planning process with your CPAs and Attorneys. In fact, McGowanGroup is proud to have evolved our Estate processing checklist, as a guide, to ensure that we provide Excellence in Service as your trusted financial partner. Please do not hesitate to ask how the McGowanGroup can help with your financial planning!
We remain committed to the mission of Superior Client Profits Through Excellence in Service. Thank you for allowing us to serve you and your family!
Spencer McGowan and The Team That Cares,
McGowanGroup Wealth Management
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Powerful NetWorth Radio Business Leadership Interviews
NetWorth Radio’s Texas Global Business Leadership Series: Spencer McGowan Interviews Brad Olsen and Oliver Doolin from Recurrent Advisors in Houston. The Texas Energy Revolution!
Prior to co-founding Recurrent, Brad was most recently the lead MLP portfolio manager for BP Capital Fund Advisors (BPCFA). Under Brad’s leadership, MLP AUM more than doubled (excluding the impact of appreciation).
From 2011 to 2015, Brad led Midstream Research for Tudor, Pickering, Holt & Co. (TPH & Co.), where he was recognized as the top all-around stock picker in the US by the Financial Times in 2013, and the top energy stock picker in the US by Starmine in 2014. Under Olsen’s leadership, the TPH & Co. midstream team was recognized in the WSJ’s “Best on the Street” poll as well as by Institutional Investor Magazine.
Brad also has experience as an investment analyst at Eagle Global Advisors in Houston, where he was part of a 3-person team that grew midstream/MLP AUM from $300mm to over $1bn from 2008 through 2011. He has also worked in investment roles at Millennium International, a large global hedge fund, and Strome Investment Management, an energy-focused hedge fund based in Santa Monica, CA. He began his career in the UBS Investment Banking Global Energy Group in Houston.
Brad earned a BA in Philosophy, Political Science, and Slavic Studies from Rice University in Houston.
Brad resides in Houston with his wife and four children. Brad was nearly fluent in Russian, but is very rusty.
Client Portfolio Manager / Energy Specialist
Oliver has spent over a decade specializing in natural resources, oil & gas, and MLP institutional equity research, most recently at Heikkinen Energy Advisors in Houston.Prior to joining Heikkinen, Oliver served in both research and business development roles at energy-focused investment banks, including 6 years as a Vice President at Tudor, Pickering, Holt & Co (TPH) in Houston, where he specialized in exploration and production (E&P), oilfield services (OFS) and midstream MLP companies.
Oliver began his career as a research analyst covering E&P and Oilfield Service companies for both TPH and Howard Weil, respectively.
Oliver holds a BS with dual concentrations in Finance and Legal Studies (Tulane University) as well as an MS in Accounting from the A.B. Freeman School of Business at Tulane University.
Oliver, originally from south Louisiana, is an avid outdoorsmen and runner. He resides with his wife and two children in Houston.
NetWorth Radio’s Powerful Business Leadership Series: Spencer McGowan Interviews Cason Shobert, Owner of Kingdom Contracting on Increasing Your Home’s Value!
Kingdom Contracting, LLC has established itself as a trusted name in the remodeling industry in Denton, TX. Over the years, we’ve honed our expertise, delivering high-quality solutions as custom home builders and home remodeling contractors, and providing top-notch roofing services. Our hands-on approach allows us to work closely with clients to ensure each project is completed with care and precision. What sets us apart from competitors is our focus on building strong business-to-business relationships.
Kingdom Contracting, LLC has established itself as a trusted name in the remodeling industry in Denton, TX. Over the years, we’ve honed our expertise, delivering high-quality solutions asWe understand the unique needs of residential and commercial clients, and we provide tailored services to meet those needs. Unlike other companies that claim to be a “one-stop shop,” we specialize in what matters most—providing the exact solutions you need. We also have a solid network of professionals we trust, allowing us to connect clients with the right experts when necessary. Kingdom Contracting, LLC is proud to serve residential and commercial clients in Denton, TX.
At Kingdom Contracting, LLC, our team is dedicated to delivering top-quality service and exceeding client expectations. Each member brings a unique set of skills and expertise, from experienced contractors to skilled project managers. We pride ourselves on our teamwork, collaboration, and commitment to delivering projects on time and within budget. Our team works closely with clients to ensure that every detail is handled with care and precision. With years of combined experience, we’re passionate about creating beautiful, functional spaces for both residential and commercial clients. We’re here to guide you through every step of the process, offering personalized solutions and exceptional customer service. We’re more than just a company—we’re a group of professionals who truly care about the success of your project.
NetWorth Radio’s Dallas Business Leadership Series: Spencer McGowan Interviews Author Dean “PappaDean” McGowan About His New Book: Keeping Your Money – Real Advice on Wise Investing!
*Don’t Miss the Special Chapter “Stupid Things People Do with Their Money”*
After receiving his BS in Business Administration with a minor in engineering from UT Austin in 1960, author Dean McGowan began his journey in wealth management as a financial advisor and mutual and pension funds manager with Schneider, Bernet & Hickman, where he was the youngest partner in the firm throughout the early seventies. In 1974 McGowan joined Paine Weber as assistant branch manager and went on to found the North Dallas branch of what later became UBS Financial Services. Before retiring from UBS in 2019, McGowan would also found the McGowan, Vehslage, and Goldberg advisory group (MVG Wealth Management).
McGowan also proudly served three years on the New York Stock Exchange committee, during which he and other committee members rewrote the entire battery of three thousand questions for the Series 7 (General Securities Representative) Exam, whose passing completion is required by brokers and other financial professionals in the U.S.
Volunteering in his community has remained equally important to McGowan. For ten years he served as a board member of the UT Dallas Naveen Jindal School of Management in Richardson, Texas, where he mentored MBS students for eight years and served as a member of the school’s financial department for four.
McGowan has additionally been grateful to have had the privilege of serving as Treasurer, Chairman of the Elders, and Chairman of the Board for Community Christian Church in Richardson, as well as teaching Sunday school and serving in a lifestyle-coaching role for several years at Christ United Methodist Church’s Project Hope in the city of Plano.
SPDR S&P 500 ETF (Exchange Traded Fund) Trust – Daily (12/31/2024 – 07/01/2025)
– Courtesy of Bloomberg LP
SPDR Dow Jones Industrial Average ETF (Exchange Traded Fund) Trust – Daily (12/31/2024 – 07/01/2025)
– Courtesy of Bloomberg LP
S&P 500 Index – Quarterly Earnings Analysis by Sector (05/16/2025 – 08/15/2025)
– Courtesy of Bloomberg LP
S&P 500 Index – Member Ranked Returns, Top 10 Best Performing & Bottom 10 Worst Performing (12/31/2024 – 07/01/2025)
– Courtesy of Bloomberg LP
The Atlanta Fed GDPNow Real GDP Estimate for 2025, Q2 (06/27/2025)
– Courtesy of The Federal Reserve Bank of Atlanta
