Jan van Eck: Q3 Macro & Market Outlook

**Adam Taggart** (0:02)
And we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host. Welcoming you here for another quarterly update with our good friend of the program, Jan van Eck. Jan, how are you doing?

**Jan van Eck** (0:14)
Great.

**Adam Taggart** (0:15)
Great. Now, most of you watching, I'm sure have heard of the VanEck family of funds. You probably own them, I imagine, in your portfolios. For the very few of you that may not have watched Jan on this program before, he's the CEO of VanEck. It's a highly respected investment company with over $116 billion in assets under management. They offer a huge variety of different funds and investment vehicles across a whole bunch of asset classes, particularly in the alternative asset space, but they're really everywhere. We have just gotten incredibly lucky on this program to have Jan, the CEO, come on this channel at the start of every quarter to share his quarterly outlook with us. So Jan, we're going to talk about Q3 2025
Any buzzword that comes to the top of your mind about how this quarter may differ from the previous few we've just lived through?

**Jan van Eck** (1:08)
A little blindfolded. A little hard to tell what's going on, but let's get into it. All right.

**Adam Taggart** (1:16)
Well, as usual, you have done all the advanced work for me and put together a great presentation. Should we just kick that off?

**Jan van Eck** (1:24)
Yeah, let's go. So the title of this is, I've been talking about the 3% reckoning for about a year right now. And the context for that is that the US budget deficit is unsustainably high. That has explained a lot of what's happened in the markets. The high level of government expenditures explained why we didn't have a recession after the interest rate hikes of 2022 So it's really one of the largest forces in the markets. And we knew that a new president would be elected. And usually major fiscal policies are addressed the year after a presidential election. So the question is sort of what's the play out of that? It's a little bit unclear. I feel like we're in the middle of the eye of the hurricane. But let's talk about some of the things that are super clear. So, first of all, even though the tenure hasn't been affected by the budget deficit, the best performing assets, Bitcoin and gold, I think, have been beneficiaries of the big spending and reducing confidence in the US dollar. So that has helped portfolios dramatically, and we'll drill into that a little bit. There's a lot of things that have happened in the first half of the year with respect to AI that are really going to be playing out in the markets and with employment over the next couple of months and years. And then a lot of changes. We've talked about my high conviction view that India in 10 years is going to emerge as the fourth largest consumer market in the world. Let's look at how that's playing out in the markets because that's not covered a whole lot in the US. So I'm going to dive right in.
Basically, I'm not going to go through all the text on this slide, Adam, but as you know, kind of our view at VanEck is that the financial markets are affected by major events in the world, namely technology and then politics and economics. And so a lot of times in history, like the emergence of China was affecting portfolios before the creation of an asset class called emerging markets, or gold and Bitcoin were great buys before they became mainstream investments in 1968 and in 2017 respectively. So that's kind of how we look at it, that the market cap way of looking at the world doesn't always reflect the full set of opportunities and what you should be doing with your portfolio. So just to put that in context, a year ago, Adam, I hope you remember, I basically was calling to sell growth stocks. And the reason for that is I love multi-decade charts. Jan loves multi-decade charts. So here was a multi-decade chart that showed last summer growth versus value had hit the same peak as at the peak of the Internet bubble in 1999 So that and the next chart, which shows S&P equal weight at a low, the same also as 1999, both indicated that growth stocks were overvalued last July when we were sitting down literally a year ago. And so that turned out to be correct. We'll talk about that a little bit later. But it's that multi-decade perspective that bring it to the markets right now. So I did say that we're a little blindfolded right now. And I want to explain that a little bit. I'm going to talk about just a quick recap on the federal budget deficit that we've talked about before in prior quarters. But it's really hard to know what's going on with that deficit. So we'll talk about that. There's some really bad numbers in the headlines in terms of percent of GDP, but let's just plug in to that. And we know that some of those numbers are flat out not going to be reliable. Then the employment, we have an unemployment stat today that showed good labor market. But we've got these big pressures. We know that AI is going to at some point affect the labor market. At the same time, we have this offset because illegal immigration has literally gone to zero. So you have these countervailing forces. And I think if we look at the second half of the year, Adam, we're going to be surprised by a statistic, whether a very strong employment number or a very weak one. But my point is, there's going to be a lot of noise and not to overreact to a couple of headlines. Inflation, again, something else has two conflicting forces, tariffs driving it up, but then technology driving it down, goods inflation, and energy prices are low, but services are sticky. Again, a mixed story, hard to tell what's going on. Then we know the economy is slowing a little bit, Adam, but profit growth was good in the second quarter. I think that will continue to surprise and I'll explain why. Budget deficit, I don't like it. I think we should own gold and Bitcoin in our portfolios, and that has played out fantastically well. So far, in 2025, Bitcoin is up 14%, gold bullion is up 26%. These are 12-month stats, so I'm just giving you the year to date, and gold shares up 54% in the first half of this year. So if you believe the story that this is a major thing happening in the markets and you had your portfolio hedged by owning some store value assets, you're extremely happy in the first half of this year.