“Maturity is the capacity to endure uncertainty”’ 

John Huston Finley

Our January Investment Outlook suggested we could face “unusual uncertainty” stemming from the Trump Presidency as 2025 unfolded.   This prediction appears to have been accurate.   The situation is unusual because politicians rarely deliver on campaign promises, in our opinion.   However, President Trump is actively pursuing his agenda: implementing tariffs, deregulation,  eliminating government inefficiency, ending the wars in both Europe and the Middle East, and reducing taxes in various areas.   Add to this list his promise of reducing inflation.

In doing so, we are facing the unusual uncertainty we anticipated as his methods and approach to making progress on his promises is leaving many uneasy and, in some cases, fearful.   Equity markets, as a whole, have seen modest declines, particularly among the Magnificent Seven, while value stocks have shown greater resilience.  Fixed-income investments have posted modest gains.  

Our clients with allocations to FLI’s Dividend Growth strategy and modest fixed-income portfolios have largely weathered the downdraft better than those with more growth-oriented equity strategies.   While real estate investments seem to be building significant value, delays in realizing these gains have been frustrating.  Nevertheless, we remain confident in the eventual outcome.   

The President’s unconventional and brusque approach has created a great deal of uncertainty, as reflected by both the stock market decline from its February peak as well as a decline in the strength of the dollar, at least in the case of the Euro.

In addition, earnings estimates for the S&P 500® Index as well as U.S. GDP growth have suffered in anticipation of the meaningful impact from tariffs and a possible trade war in our opinion.

In our opinion, these potential declines appear to reflect growing concerns or a lack of confidence in domestic economic policies, particularly the seemingly haphazard and erratically evolving tariff policies.  It is unclear whether these tariff decisions represent a long-term strategy as a negotiating tactic.  This is particularly noteworthy because consumer spending drives a much larger portion of the economy than the manufacturing sector, which might benefit from tariff-related job creation.  Despite these concerns, consumer balance sheets remain fundamentally strong, although consumer confidence has been negatively impacted.

What is not seeing the light of day are the prospects for greater certainty on prospective income and estate taxes affecting individuals, as well as possible corporate tax relief.  These benefits from tax policy may need to be accelerated, given the fallout from President Trump’s aggressive tariffs.  Also, we expect the deregulation efforts could have a positive economic impact.  Combine that with the supposed net benefits from DOGE, and perhaps the economic future is brighter than the current gloom.  Of course, much of this agenda requires legislative approval, and with Republicans holding an ultra-slim majority in the House of Representatives, uncertainty persists. 

Geopolitical tensions continue to dominate headlines beyond the ongoing wars in Europe and the Middle East.  Adding to these concerns are strained relations with China and the President’s expressed desire to somehow annex or take over both Greenland and the Panama Canal (we will not even discuss making Canada the 51^st State).  This too adds to the uncertainty investors are dealing with domestically.  Global investors are also expressing concern with the U.S. as international markets are outpacing the S&P 500® Index for the first time in years. 

Unusual Uncertainty Gives Way to Our Cautious Optimism

Despite the uncertainty described above, we still remain cautiously optimistic.  We still believe that the earnings for the S&P 500^® Index will grow, but, as we stated in last quarter’s thought piece, at a lower rate than pundits suggested at the beginning of the year.

Valuations, in our opinion, are not nosebleed by any stretch of the imagination.  The price-earnings ratio of the market-cap weighted S&P 500^® Index and the S&P 500^® Equal Weighted Index are as follows:
 

These appear reasonable to us, as inflation hovers between 2.4% and 3% while the Federal Reserve is now predicting two more rate cuts before year end.  We expect the 10-year U.S. Treasury yield to remain range bound between 4% and 5%.  The current level of inflation and long-term interest rates are supportive of reasonable mid- to high-single-digit equity returns this year, with the market gains broadening out across more sectors.

The current “tumult” to us represents an opportunity.  Once the uncertainty surrounding tariffs and tax policies clears, we anticipate improved investor sentiment and increased economic activity, including in real estate investments.  While some analysts have increased the probability of recession, we maintain our view that a recession is unlikely in 2025.

Stay the Course

Despite the first quarter’s market correction, we remain confident that the long-term outlook remains positive.  This confidence stems from three key factors: growing corporate earnings, increased dividend distributions, and improved cash flows from most of our investments. 

We maintain our view that inflation will gradually moderate, albeit stubbornly, and expect the data-dependent Federal Reserve will reduce short-term rates later this year.  Our modest exposure in some strategies to international markets is helping, as we suggested in our Annual Investment Outlook in January.  The broadening out of the equity markets thus far has rewarded our clients that follow our bookend approach, which balances exposure to high-growth companies with our dependable dividend growing strategy.  This, coupled with some fixed income exposure for many as well as real estate and alternatives exposure, has, to a degree, blunted the downturn.

The obvious discomfort from market corrections is difficult for almost everyone to endure.  This is especially the case when it appears to be caused by a dramatic change in trade policies, somewhat draconian attempts to make the government more efficient, and ongoing negotiations with brutal dictators who disregard human life and human rights.  Of course, I am talking about the current impact of the Trump Administration.  The icing on this cake is the uncertainty faced by individuals and businesses regarding tax policies for the long term and the prospects of some parts of the Tax Cuts and Jobs Act of 2017 sunsetting on December 31, 2025, unless new legislation is enacted.  Equity and real estate markets do not typically prosper when there is uncertainty on basic policies. 

Let us not forget that sometimes short-term pain leads to long-term gain.  Government efficiency is long overdue.  Facing up to bullies around the world is needed, as strength can lead to peace.  Tax policies that promote business growth are good, and deregulation encourages business growth.  Artificial Intelligence (AI) seems to be transformative with many potential positives (although there will be some pain).   Companies both investing in and benefitting from AI will likely emerge as market leaders.  The Fed’s continued easing of monetary policy, if inflation remains reasonable, will also help at some point.  While reciprocal tariffs may sound reasonable to some, the impact of President Trump’s tariff policies remains to be understood in terms of their impact on inflation, particularly if they result in decreased growth in U.S. GDP.

We stand by the views expressed in our Investment Outlook, despite the current unpleasantness during the first quarter.  Our position remains one of cautious optimism, though we acknowledge the unusual uncertainty surrounding the Administration’s agenda.  We maintain our commitment to investing for the long term, by focusing on diversified portfolios of quality companies and real estate, believing that reasonable interest rates combined with growing earnings, dividends, and cash flow will lead to investment gains.  History has shown that periods of uncertainty and volatility often present prudent opportunities to invest or maintain existing investments.

Wishing you a wonderful spring season,

P.S. as of April 23,2025

Part 1 was written as of March 31, 2025 and prior to the President announcing significant policy changes on global trade.  This tariff-driven policy has been modified in the days subsequent to its announcement.  Needless to say, many of us in the investment world were taken aback by the severity of the proposed tariffs, many of which are in place, some paused to some extent, and in the case of China, significantly increased.

We believe that the boldness and unclear aspects of the tariff policy, and unresolved questions about what the President truly intends to do, leave investors, businesses, and consumers with a great deal of uncertainty.  We also believe that a significant tax bill and bold deregulation may be part of the Administration’s plan for the economy.  It remains to be determined as to the exact nature and possible impact of these last two components on the future economy.

We at FLI believe that a one-time inflation increase is quite possible.  We also are concerned that the growing uncertainty about global trade could increase the possibility of a recession this year if prices rise and demand slows.  We now estimate recession odds have increased to 50% and expect that a brief inflationary period will keep the Fed from reducing short-term rates until later in 2025 unless unemployment rises significantly.

The concept of reciprocal tariffs proposed during President Trump’s campaign might have arguably made sense, but the severity of recent measures has raised concerns among many of us.  We will carefully monitor the evolving tariff policy, potential tax legislation, and regulatory changes, while providing updates on their impact on our currently stable economy.

DISCLAIMER

The views expressed herein are those of Robert D. Rosenthal or First Long Island Investors, LLC (“FLI”), are for informational purposes, and are based on facts, assumptions, and understandings as of April 25, 2025 (the “Publication Date”).  This information is subject to change at any time based on market and other conditions.  This communication is not an offer to sell any securities or a solicitation of an offer to purchase or sell any security and should not be construed as such.  References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.  Nothing herein should be construed as a recommendation to purchase any particular security.  The companies and securities described herein may not be held in every (or any) FLI strategy at any given time.  Investment returns will fluctuate over time, and past performance is not a guarantee of future results.

This communication may not be reproduced, distributed, or transmitted, in whole or in part, by any means, without written permission from FLI.

All performance data presented throughout this communication is net of fees, expenses, and incentive allocations through or as of March 31, 2025, as the case may be, unless otherwise noted.  Past performance of FLI and its affiliates, including any strategies or funds mentioned herein, is not indicative of future results.  Any forecasts included in this communication are based on the reasonable beliefs of Mr. Rosenthal or FLI as of the Publication Date and are not a guarantee of future performance.  This communication may contain forward-looking statements, including observations about markets and industry and regulatory trends.  Forward-looking statements may be identified by, among other things, the use of words such as “expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar expressions.  Forward-looking statements reflect the views of the author as of the Publication Date with respect to possible future events.  Actual results may differ materially. 

FLI believes the information contained herein to be reliable as of the Publication Date but does not warrant its accuracy or completeness.  This communication is subject to modification, change, or supplement without prior notice to you.  Some of the data presented in and relied upon in this document are based upon data and information provided by unaffiliated third-parties and is subject to change without notice.

NO ASSURANCE CAN BE MADE THAT PROFITS WILL BE ACHIEVED OR THAT SUBSTANTIAL LOSSES WILL NOT BE INCURRED.

Copyright © 2025 by First Long Island Investors, LLC.  All rights reserved.

President Trump has swiftly assembled his cabinet, implementing numerous policy changes.  What lies ahead for investors in 2025?  How will tariffs impact the economy?  Which economic trends will shape the year?

These are just some of the questions we hear from clients and business partners.  In this web seminar we will break down the post-election landscape and share our market outlook, including the investment themes that matter most right now.

DISCLAIMER

This presentation has been prepared for informational and educational purposes only by First Long Island Investors, LLC (“FLI”). This presentation should only be considered current as of March 6,2025 (or as otherwise indicated in the presentation) without regard to the date on which it was received or accessed. As a consequence, events may transpire subsequent to the date of this presentation that can render the contents inaccurate or obsolete. FLI believes the information contained in this presentation to be reliable as of the presentation date but does not warrant its accuracy or completeness. No party is obligated to update the contents of this presentation. However, FLI maintains the right to delete, modify or supplement this presentation without prior notice.

The contents of this presentation are not intended to provide investment advice and under no circumstances does anything contained in this presentation represent a recommendation to buy or sell any particular security or to invest in any particular product. Nothing set forth herein shall constitute an offer to sell any securities or constitute a solicitation of an offer to purchase any securities. Past performance is not indicative of future results. Investment returns will fluctuate over time and may be volatile.

The names “First Long Island”, “FLI”, and all derivations thereof are the property of their respective owners and may not be used or copied without prior authorization. You acquire no rights or licenses to download, upload, post, transmit, publish, or distribute this presentation or any other material in any way that infringes or otherwise contravenes the rights of FLI or any third party, including any copyright, trademark, patent, rights of privacy or publicity or any other proprietary right.

In no event shall FLI be liable to any party for any damages, costs, fees, expenses, or losses of any kind in connection with any use of the contents of this presentation even if advised of the possibility of such damages.

2025: CAUTIOUS OPTIMISM WITH SOME UNUSUAL UNCERTAINTY
 

For years, we have been guided by the direction of corporate earnings (especially those of the companies we invest in) and real-estate cash flows, in conjunction with the level and direction of interest rates.   The values of companies and real estate are primarily measured by two factors: earnings/cash flows and the impact of changes in interest rates.  This could not have been more evident over the past three years.  During this period, we experienced the benefits of declining interest rates coupled with rising earnings, and the challenges of significant interest rate increases as the Federal Reserve worked to control inflation.  This heightened inflation emerged from two main sources: the economic aftermath of the COVID-19 pandemic and excessive federal spending, which not only fueled inflationary pressures but also contributed to mounting national debt.  Chart 1 shows inflation, S&P 500^® index earnings growth (or decline), and the federal funds rate over the past ten years:
 

Financial markets experienced noteworthy volatility in 2022, marked by multiple increases in short-term interest rates (four 75-basis-point increases, two 50-basis-point increases, and one 25-basis-point increase).  This led to a dramatic decline across all asset classes: the stock market plummeted, bond holders faced significant paper losses due to rising 10-year U.S. Treasury rates, and the commercial real-estate market faced liquidity challenges and office vacancies.  Adding to market turbulence was the unprovoked invasion of Ukraine by Russia.  Only a few times in recent history did both stocks and bonds decline simultaneously by more than 10%.  The volatility created an illiquid financing environment for real estate, a sector already weakened by COVID-19’s impact on attendance in offices.  However, 2023 saw a turnaround with significant gains in the stock market, especially fueled by technology-oriented growth companies and the surging interest in artificial intelligence (AI).  NVIDIA emerged as a standout performer, with its chips becoming essential for data centers and AI.   At the same time, as you can see in Chart 1, inflation gradually moved down towards the Federal Reserve’s 2% target, though not quite reaching it.  This year was also marked by geopolitical turmoil, including the Hamas attack on Israel leading to more than a thousand deaths, barbarism not seen since al Qaeda, and over 200 hostages forcefully taken into Gaza, where some live and many perished.  Now we as investors were digesting two regional wars as Hezbollah and the Houthis joined in attacking Israel with daily missiles and drones.  The U.S. provided military support to both Ukraine and Israel, boosting domestic defense spending and benefiting defense sector stocks throughout 2023 and 2024.

As 2024 began, corporate earnings continued their upward trajectory as shown in Chart 1, while 10-year U.S. Treasury rates increased late in the year.  Departing from recent history, however, equity markets faltered in December.  The stock market rally was dominated by the Magnificent Seven – Amazon.com, Tesla, Microsoft, Alphabet, Apple, Meta Platforms, and NVIDIA.  In an almost unprecedented manner, these seven stocks make up 33% of the S&P 500^® Index and were responsible for 54% of this past year’s stock market gain.  This concentration led to the S&P 500^® Index (market-cap weighted) price-earnings ratio of 21.6x on 2025 projected earnings compared to the S&P 500^® Equal Weighted Index price-earnings ratio at a more modest 16.4x.  Of course, the projected 2025 earnings growth for the Magnificent Seven is 18%, while the other 493 companies are projected to grow 11%.  Herein lies the dilemma for investors:  does one continue overweighting those companies whose stocks increased between 13% and 171% or begin to broaden one’s portfolio to reflect the cheaper valuation for the majority of companies in the S&P 500^® Index?  Meanwhile, mid-cap, small-cap and international indices underperformed the S&P 500^® Equal Weighted Index.  Perhaps at some point mid-cap and small-cap will have their day (and we do include them in our most diversified strategy).  The international indices have trailed domestic indices cumulatively since 2008, influencing our decision to maintain minimal international exposure in some of our strategies, while still adhering to diversification requirements.

So, market despair in 2022 for basically all investors; happiness in 2023 as we rebounded from the ugliness of higher interest rates and inflation, while coping with two worsening wars and even Russia threatening a nuclear attack; and, once again in 2024, growth stocks continuing to dramatically outpace value stocks.  However, interest rates for the 10-year U.S. Treasury rose again to 4.6% by year-end reflecting a more cautious Federal Reserve seeking to attain its elusive goal of 2% inflation.  In our opinion, this negatively impacted equity markets at the end of the year, but there was still happiness as the equity markets mostly recovered the losses of 2022.  Bitcoin surged along with gold to new highs reflecting, in our opinion, the growing national debt and inflation concerns as well as domestic political uncertainty (more on that shortly).

Entering 2025, investors face a complex landscape: projected corporate earnings growth of 14.6%; inflation seemingly hovering between 2.5% and 3% (again, not quite at the Fed’s goal of 2%); the 10-year U.S. Treasury yield at 4.6%; ongoing conflicts in Ukraine and the Middle East, including a hostage situation going on its second year; and a new sheriff in Washington, D.C., President-elect Trump.  Market valuations have become more attractive following the year-end volatility.

The recent U.S. election resulted in Republican control of the House, Senate, and Presidency.  The new administration’s agenda includes ending wars, reducing inflation, stimulating economic growth, cutting taxes, implementing immigration reform, reducing crime, and curtailing government waste.  We as investors need to handicap President-elect Trump’s ability to accomplish any of the above, and try to determine how this impacts the different investments that we make, but always through the lens of long-term investing.  However, the Republicans hold one of the smallest House majorities in history, with extreme factions in both parties potentially impeding progress.  This political dynamic could affect the extension of Trump’s 2017 Tax Cuts and Jobs Act, which has significant estate and income tax provisions sunsetting at yearend.  Additionally, any expectations of a “peace dividend” boosting price-earnings ratios through globalization have diminished amid the ongoing global conflicts.

Our Investment Strategy View for 2025 

The past three years remind us that investment markets respond primarily to three factors:  earnings growth (or decline), inflation levels, and Federal Reserve policy in pursuit of its dual mandate of low inflation and full employment.  Recent trends in gold and bitcoin prices suggest growing concerns about national debt and inflation.  FLI does not currently recommend either asset class to clients.  Here is why we remain cautiously optimistic while acknowledging certain concerns:

1. Corporate Earnings Growth

Analysts project corporate earnings growth of 14.6%.  We believe the Information Technology sector and select other companies will continue to lead this growth.  President-elect Trump’s pro-business agenda, including tax and regulatory reforms, could support this growth – though implementation remains uncertain given political realities.  While we believe current growth projections are ambitious, overall market valuations remain reasonable.

2. Inflation Dynamics

Inflation persists between 2.5% and 3%.  It remains to be seen if President-elect Trump’s tariff policies will put upward pressure on inflation.  Also, the President-elect has strongly suggested he will reduce inflation through an aggressive energy drilling agenda, as well as reduced regulations.  Yet the impact remains uncertain given current robust domestic oil and gas production levels and the typical lag time for new production. 

3. Federal Reserve Policy

The Federal Reserve is rightly data-dependent.  Employment is still quite strong with unemployment hovering around 4%.  Achieving the Fed’s 2% inflation target without triggering a recession presents a challenge, and that has tempered the Fed’s appetite for reducing short-term rates over the next year, as seen in its most recent dot plot released in December.  We do not anticipate a recession in 2025 unless there is some exogenous shock to the economy as suggested by Fed Chair Powell at the December meeting.

4. Credit Market Health

Current high-yield bond spreads compared to U.S. Treasuries remain narrow, suggesting minimal stress in the economy. 

5. Consumer Strength

Consumer spending, representing nearly 70% of U.S. economic activity, is reasonably strong as wage gains outpace inflation, housing values appreciate, and wealth increases from stock market gains.  We expect these factors to continue supporting consumer spending.

6. AI Innovation Impact

The widespread adoption of artificial intelligence across industries and consumers promises enhanced productivity and innovation.  This trend drives substantial corporate investment, particularly in geographically dispersed data centers.

Investment Implications

The factors above support our cautiously optimistic outlook.  Projected earnings growth should more than mitigate any potential degradation of price-earnings multiples, leading to modest equity gains in 2025; however, not all companies will be treated alike.

That is why we strongly encourage our two-pronged investment approach:

· Growth-oriented strategies focusing on large-cap companies with above-average earnings growth.

· Financially strong dividend growers that are typically somewhat dominant in their industries.

The expected 7%+ growth in annual dividends for our Dividend Growth strategy offers valuable protection, particularly if inflation remains between 2.5% and 3%, or even moves somewhat higher.  This strategic combination should help insulate our clients from potential surprises in inflation while the rate on the 10-year U.S. Treasury remains in the 4% to 5% range.

For many clients, it is prudent to have some exposure to fixed income where after-tax rates for medium-term maturities should deliver a slight gain above inflation.  Thus, a fixed income allocation serves as a buffer against market volatility.  We do not anticipate a repeat of 2022’s aggressive Federal Reserve actions that caused significant losses for bond holders.

Our uncertainty comes from the concern that while the new administration’s policies could enhance the business environment, they might also fuel higher inflation.  Higher inflation would, in our opinion, force the Federal Reserve to maintain or even increase short-term rates rather than implement expected reductions.  Additionally, we hope the two regional wars do not become greater global conflicts, noting President-elect Trump’s campaign promise to resolve both conflicts and secure the release of hostages, including American citizens.

Looking ahead to 2025, we see potential for investor gains based on several factors:

· Interest rates remaining within a stable range, reflecting controlled inflation;

· Improving corporate earnings;

· Possible de-escalation of global hostilities in Ukraine and the Middle East along with the release of the remaining hostages;

· Pragmatic immigration policy implementation;

· Extension/modification of the income and estate tax provisions of Trump’s signature legislation, the 2017 Tax Cuts and Jobs Act.  A modification of the SALT deduction cap would benefit many of our clients significantly.

As investors, we need a diversified asset allocation plan that achieves one’s long-term investment goals, despite the current uncertainty.  We expect considerable market volatility driven by domestic political developments and their potential impact on inflation and tax policy.  In addition, unpredictable geopolitical strife, including possible cyberattacks and terrorism, adds another layer of uncertainty and volatility.  In our opinion, as stated earlier, one’s plan should consist of modest fixed-income exposure, strategic investment in growth companies, and dividend-growing companies as well as select real estate and alternative strategies, where appropriate.

Of course, careful tax planning is essential, particularly given accumulated unrealized capital gains.  We encourage all clients to engage with our wealth management team for tax optimization strategies and to schedule regular reviews with our investment professionals to fine tune asset allocations where appropriate. 

On behalf of the entire FLI team, we trust these insights will prove valuable as we navigate the year ahead.  More importantly, we wish you and your families a healthy, happy, and prosperous new year.  We remain dedicated to serving your investment and wealth management needs! 

Wishing you a healthy, happy, and prosperous New Year!

Robert D. Rosenthal

Chairman, Chief Executive Officer,

and Chief Investment Officer

DISCLAIMER

The views expressed herein are those of Robert D. Rosenthal or First Long Island Investors, LLC (“FLI”), are for informational purposes, and are based on facts, assumptions, and understandings as of January 15, 2025 (the “Publication Date”).  This information is subject to change at any time based on market and other conditions.  This communication is not an offer to sell any securities or a solicitation of an offer to purchase or sell any security and should not be construed as such.  References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.  Nothing herein should be construed as a recommendation to purchase any particular security.  The companies and securities described herein may not be held in every (or any) FLI strategy at any given time.  Investment returns will fluctuate over time, and past performance is not a guarantee of future results.

This communication may not be reproduced, distributed, or transmitted, in whole or in part, by any means, without written permission from FLI.

All performance data presented throughout this communication is net of fees, expenses, and incentive allocations through or as of December 31, 2024, as the case may be, unless otherwise noted.  Past performance of FLI and its affiliates, including any strategies or funds mentioned herein, is not indicative of future results.  Any forecasts included in this communication are based on the reasonable beliefs of Mr. Rosenthal or FLI as of the Publication Date and are not a guarantee of future performance.  This communication may contain forward-looking statements, including observations about markets and industry and regulatory trends.  Forward-looking statements may be identified by, among other things, the use of words such as “expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar expressions.  Forward-looking statements reflect the views of the author as of the Publication Date with respect to possible future events.  Actual results may differ materially. 

FLI believes the information contained herein to be reliable as of the Publication Date but does not warrant its accuracy or completeness.  This communication is subject to modification, change, or supplement without prior notice to you.  Some of the data presented in and relied upon in this document are based upon data and information provided by unaffiliated third-parties and is subject to change without notice.

NO ASSURANCE CAN BE MADE THAT PROFITS WILL BE ACHIEVED OR THAT SUBSTANTIAL LOSSES WILL NOT BE INCURRED.

Copyright © 2025 by First Long Island Investors, LLC.  All rights reserved.

With Republicans sweeping control of the White House, House, and Senate, investors are asking the hard questions: What’s next for the markets?  Where are interest rates headed?  And is the inflation fight really over?

These are just some of the questions we hear from clients and business partners. In this web seminar we will break down the post-election landscape and share our market outlook, including the investment themes that matter most right now.

DISCLAIMER

This presentation has been prepared for informational and educational purposes only by First Long Island Investors, LLC (“FLI”). This presentation should only be considered current as of November 20, 2024 (or as otherwise indicated in the presentation) without regard to the date on which it was received or accessed. As a consequence, events may transpire subsequent to the date of this presentation that can render the contents inaccurate or obsolete. FLI believes the information contained in this presentation to be reliable as of the presentation date but does not warrant its accuracy or completeness. No party is obligated to update the contents of this presentation. However, FLI maintains the right to delete, modify or supplement this presentation without prior notice.

The contents of this presentation are not intended to provide investment advice and under no circumstances does anything contained in this presentation represent a recommendation to buy or sell any particular security or to invest in any particular product. Nothing set forth herein shall constitute an offer to sell any securities or constitute a solicitation of an offer to purchase any securities. Past performance is not indicative of future results. Investment returns will fluctuate over time and may be volatile.

The names “First Long Island”, “FLI”, and all derivations thereof are the property of their respective owners and may not be used or copied without prior authorization. You acquire no rights or licenses to download, upload, post, transmit, publish, or distribute this presentation or any other material in any way that infringes or otherwise contravenes the rights of FLI or any third party, including any copyright, trademark, patent, rights of privacy or publicity or any other proprietary right.

In no event shall FLI be liable to any party for any damages, costs, fees, expenses, or losses of any kind in connection with any use of the contents of this presentation even if advised of the possibility of such damages.

First Long Island Investors, LLC was honored to host Dr. Meena Bose, Chair of Presidential Studies at Hofstra University, at the Garden City Hotel on October 30^th for our semi-annual Thought Leadership Breakfast.  Dr. Bose is the author of “Shaping and Signaling Presidential Policy: The National Security Decision Making of Eisenhower and Kennedy”, and the editor of several volumes in presidential studies. 

The discussion, which focused on the 2024 U.S. presidential election, began with Dr. Bose providing context surrounding the current political climate of the United States.  She discussed how the country is more divided than ever and faces a multitude of challenges, making the 2024 election highly consequential.  Dr. Bose noted that it is not just the presidential election that will impact America; the House and Senate elections will also shape the future of our country.  The composition of these two legislative branches will be crucial in determining policy moving forward.

Dr. Bose drew parallels to the 2016 election and compared former President Trump’s positions then and now.  Although former President Trump was considered an underdog in both the 2016 and 2020 elections, Dr. Bose emphasized that the 2016 race offered a more apt comparison for 2024 due to the significant impact the COVID-19 pandemic had on the 2020 election. 

At the time of the 2016 election, various factors seemed to point to Hillary Clinton’s victory, including national polls, the candidates perceived political leadership qualities, party support, fundraising success, and overall public opinion.  However, Dr. Bose pointed out that a crucial shift in voter support within Democratic-leaning states like Pennsylvania, Michigan, and Wisconsin was not adequately recognized.  This oversight contributed to Trump’s ultimate victory in 2016, despite Clinton’s favorability by many metrics.  

Looking ahead to the 2024 election, Dr. Bose underscored that the outcome will hinge on the performance of the swing states: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin.  The deciding factor for voters in these battleground states, she suggested, will be the issues they prioritize most – namely the economy, immigration, foreign policy, and reproductive rights.

Dr. Bose pointed out that former President Trump seems to be performing better in polls compared to his previous campaigns against Clinton and Biden, despite being behind nationally in those races.  Dr. Bose referenced two methods for predicting the election winner that historically have had very high success rates.  The first method is Nate Silver’s data-driven approach, which at the time pointed to former President Trump having a slight edge over Vice President Harris.  The second method was created by Allan Lichtman, who has correctly predicted nine of the last ten presidential elections using his “13 keys” system.  This approach focuses on the political landscape and the incumbent party’s performance rather than on polling or other conventional metrics. According to Lichtman’s model, the candidate who wins the majority of the thirteen keys is likely to prevail in the election.  Lichtman’s method predicted Vice President Harris as the winner.  The voters have since spoken, and we now know the outcome of the election.  Hopefully, the country can come together and work towards a brighter future.