The Week in Review
Markets are never static. They pulse, shift, and change direction in ways that demand both discipline and perspective. Last week gave us another reminder of that reality. The U.S. composite PMI, a measure of broad economic activity, rose to 55.4 in August. Readings above 50 suggest expansion, and this number reflects continued resilience across manufacturing and services despite persistent uncertainty.
Housing starts also rose to just over 1.32 million in July. This increase in new construction signals ongoing demand and confidence among builders. Yet behind the headline there remains a tension. Affordability continues to challenge families, particularly younger ones looking to buy their first home. Rising construction is welcome, but it doesn’t erase the deeper supply-demand imbalance.
Together, these data points reinforce an economy that continues to grind forward. Businesses are finding footing. Consumers are still in the game. Housing, while stretched, shows pockets of strength. For investors, it highlights both opportunities and risks, the two constant companions of capital markets.
The Week Ahead
Looking forward, three major releases will shape the market conversation. The first is consumer confidence. Confidence is not an abstract measure. It drives spending, borrowing, and investing. When households feel secure in their jobs and income, they spend more freely, which in turn fuels economic growth. When they grow cautious, the reverse occurs. This week’s report will show whether sentiment remains resilient in the face of shifting prices and policy debates.
Second comes the second estimate of second-quarter GDP. The initial number gave us an early snapshot of growth, but revisions often reveal the true contours of the economy. Investors will watch for any significant changes that could alter expectations for interest rates or corporate earnings. Finally, the Personal Consumption Expenditures index, or PCE, will be released. This is the Federal Reserve’s preferred measure of inflation. If PCE continues to ease, it provides more flexibility for policymakers. If it remains stubborn, the Fed’s balancing act between supporting growth and containing inflation grows even more delicate.
These three reports matter not because they move markets for a day or two, but because they shape the foundation of long-term policy and planning. For individuals and families, they are reminders that financial decisions should not be based on noise but on enduring principles.
Thought of the Week: The State of Private Equity
One of the most significant developments in capital markets this year has been the rebound in private equity exit activity. Despite elevated uncertainty in the first half of 2025, dealmaking has accelerated compared to the same period in 2024. Deal volumes are up 104 percent year over year, totaling more than $330 billion. Deal counts are higher by 18 percent, surpassing 730 transactions. Private equity firms typically realize returns by selling companies either to strategic buyers through mergers and acquisitions or by bringing them public through initial public offerings. Both channels have been active this year, a healthy sign for the ecosystem. The proceeds from these exits flow back to investors, fueling new fundraising and future investments. In short, it is the flywheel that keeps private markets in motion.
At the start of the year, many expected dealmaking and IPOs to accelerate thanks to a perceived pro-business environment and the prospect of lower rates. The reality proved uneven. Seesawing trade and tariff policies dented activity in the second quarter. Yet despite these headwinds, private equity firms still delivered their second-highest first-half exit volumes on record, according to Pitchbook. Only the extraordinary year of 2021 stands taller.
Why does this matter for investors outside the private equity industry? Because it signals liquidity is returning. Portfolios that had been trapped in limbo, waiting for favorable conditions to sell or go public, are now finding outlets. This reduces the buildup of inventory and restores the rhythm of capital rotation. As the second half of 2025 unfolds, the outlook for private equity remains constructive. Clarity in trade and economic policies, combined with a more stable inflation backdrop, could pave the way for continued activity into 2026. For diversified portfolios, private equity remains a compelling source of potential growth. While not without risks, it represents an asset class where patience can be rewarded, and where long-term horizons align with disciplined capital allocation.
Wisdom for the Week: Respect the Past, Remain Open to the Future
The Roman Stoic Seneca once wrote, “Won’t you be walking in your predecessors’ footsteps? I surely will use the older path, but if I find a shorter and smoother way, I’ll blaze a trail there. The ones who pioneered these paths aren’t our masters, but our guides. Truth stands open to everyone, it hasn’t been monopolized.” This passage, from his Moral Letters, speaks directly to the tension we face in every era: how to honor tradition without becoming captive to it. Traditions often represent time-tested best practices. They are valuable precisely because they worked for generations. Yet history is also a story of innovation. What we now call conservative ideas were once radical departures. The Roman Republic itself was an experiment. The same is true of the modern portfolio, or retirement planning as we know it.
Seneca’s reminder is not to abandon the wisdom of the past but to view it as a guide. If new insights prove truer or more effective, we must adopt them. Stoicism, psychology, economics, and even financial technology evolve. We should never allow ourselves to become prisoners of what Seneca calls “dead old men who stopped learning two thousand years ago.” In financial planning, this means respecting proven strategies—diversification, disciplined savings, risk management—while embracing better tools and new evidence. It means using Monte Carlo simulations, behavioral insights, or advanced tax planning not as replacements for discipline, but as refinements. To stand still is to fall behind. To honor the past is to learn from it, not worship it.
Tax Planning: Back to School, Back to Savings
As the school year begins, families are reminded of both the joy and the financial burden of education. Tuition, room, board, books, and fees create costs that rival a mortgage. Yet within those expenses lie opportunities for tax savings that too often go unclaimed. The first is tuition deductions. Parents may deduct up to $4,000 in qualified tuition expenses, subject to adjusted gross income limits. This applies not only to their children’s education but also to their own or to other dependents they claim. The key is documentation. Form 1098-T, which schools send in January, provides the necessary record. Parents should ensure accuracy and remember that grants and scholarships covering tuition cannot be double-counted.
The American Opportunity Credit remains one of the most valuable provisions, worth up to $2,500 per eligible student. It applies to the first four years of post-secondary education and can generate up to $1,000 in refundable credit beyond tax liability. To qualify, the student must pursue a degree or credential and attend at least half-time.
The Lifetime Learning Credit, though smaller, offers broader flexibility. It provides up to $2,000 per tax return per year and applies to all years of higher education, including courses designed to improve job skills. Unlike the American Opportunity Credit, it is not limited to four years. It is, however, capped by the taxpayer’s total liability.
For both credits, accurate reporting is essential. Families must use Form 8863 and cannot double-count expenses or claim multiple credits for the same student in the same year. Income limits apply, so higher-earning households must check eligibility.
Employers can also play a role. Businesses may provide up to $5,250 in education assistance per employee annually without tax consequences. In family businesses, this opens planning opportunities. Hiring a child legitimately involved in the business and paying for relevant education can create both a business deduction and an education credit. Done properly, it provides tax savings across generations.
These provisions underscore a simple truth: tax planning is not just about the wealthy. It is about understanding the code, applying it correctly, and aligning expenses with opportunities. In education, this means turning the cost of knowledge into a catalyst for savings.
College Planning: How Assets Affect Financial Aid
Beyond taxes, education planning involves navigating the complex world of financial aid. Many parents worry that the assets they have worked hard to accumulate will undermine their children’s eligibility for assistance. The truth is more nuanced.
The Free Application for Federal Student Aid, or FAFSA, provides the baseline. It ignores certain major assets, including primary home equity and qualified retirement accounts such as IRAs, 401(k)s, and pensions. These protections ensure that families are not penalized for saving for retirement or owning a home. However, FAFSA does consider taxable accounts, 529 plans, and custodial accounts. Parent assets are assessed at a maximum of 5.64 percent, while child assets are assessed at 20 percent. That means a custodial account of $50,000 can reduce aid eligibility by more than $10,000, while the same amount in a parent’s account would only reduce it by a fraction. This disparity underscores the importance of asset location. Shifting savings into parent-owned 529 plans or keeping funds within retirement accounts can significantly improve aid eligibility. It also highlights the value of planning early, rather than waiting until senior year of high school.
The CSS Profile, required by many private and selective institutions, digs deeper. It considers home equity, non-qualified annuities, and even family business interests. It assesses parent assets at 5 percent and child assets at 25 percent. It does not provide the same asset protection allowance as FAFSA, which means the hit can be greater. Families must understand these differences and tailor their approach. Sometimes it means appealing to a school’s aid office if the methodology creates an unfair burden. Sometimes it means focusing on merit aid at institutions more generous with high-income families. In every case, knowledge is power.
For parents, the fear that saving for college automatically destroys aid chances is often exaggerated. More often than not, disciplined saving leaves families in a stronger position regardless of aid outcomes. The true danger lies in failing to save, assuming aid will fill the gap.
Lessons for Investors and Families
The week’s data, the rebound in private equity, and the intricacies of tax and college planning may seem unrelated. But they all connect through a central theme: respect the past, remain open to the future. Economic indicators remind us of resilience, but also caution. Private equity teaches the value of patience, cycles, and the importance of liquidity. Tax credits and aid formulas reveal the importance of strategy, documentation, and knowing the rules of the game. For investors, the message is that markets are dynamic. What worked yesterday may not work tomorrow. But principles—discipline, diversification, patience—remain constant. For families, the message is to plan deliberately, act strategically, and take advantage of tools available today. The Stoics remind us to see clearly, act with purpose, and adapt when necessary. Financial planning is no different.
Closing Thoughts
We live in a world of constant flux. Markets rise and fall. Policies change. Families evolve. What endures is the need for clarity, discipline, and resilience. Seneca’s wisdom is as relevant now as it was two millennia ago. The past guides us, but the future belongs to those willing to learn, adapt, and innovate. As we head into the second half of 2025, let us take these lessons seriously. Let us respect the wisdom of tradition, embrace the opportunities of the present, and remain open to the future. Planning is not just about money. It is about purpose, resilience, and the courage to chart a course in uncertain waters. That is our mission.