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    Earlier this year, we made a case for global investing at a time when it felt decidedly out of favor, as we also did with commodities several years ago. With U.S. mega-cap technology stocks continuing to dominate headlines and portfolios, the temptation to stay domestic was strong. But we believed the story was broader than that. Valuations overseas were compelling, currencies were supportive, and the cyclical recovery in international markets was quietly gaining traction.

     That conviction has been rewarded. Year-to-date through September 30th, the MSCI EAFE Index is up 25.62%, and the MSCI ACWI ETF Index has gained 18.55%, both outperforming the S&P 500 for much of the year (The funds we primarily use in this sector, Goldman Sachs International and First Eagle Global are up 25.11% and 16.26%, respectively). These returns weren’t driven by narrative—they were driven by fundamentals. Earnings growth in Europe, policy stability in Japan, and a rebound in emerging markets all contributed to a more balanced global landscape.

    This isn’t just a moment to acknowledge what worked or pound our “collective” chests over correct calls as that can lead to anchoring or confirmation bias which is never good for investors. It’s more of a reminder that thoughtful diversification—especially when it’s unpopular—is often rewarded. We continue to believe that global investing is not just a hedge against domestic risk, but a source of long-term opportunity.

     With global equities now contributing meaningfully to portfolio returns, our attention is turning toward a sector that has quietly fallen out of favor: Healthcare. For three decades, healthcare stocks delivered returns comparable to technology—with far less volatility. But since 2020, the sector has stagnated. As J.P. Morgan’s Eye on the Market article “Sick as a Dog” recently noted, healthcare now trades at one of its lowest relative valuations in over 30 years. Large-cap pharma stocks (excluding Eli Lilly) trade at forward P/Es of just 8x–9x. Biotech, once a darling of innovation, has seen 80% of its IPOs since 2018 implode. Managed care returns have collapsed, and life sciences firms face funding headwinds from proposed cuts to NIH and other research institutions. Yet beneath the surface, there are reasons to be constructive as evidenced by the fact that many of our “flexible” value-oriented managers have been buying healthcare stocks recently. Valuations are pricing in a lot of bad news, and history suggests that low expectations often precede strong recoveries. Innovation continues to advance—GLP-1 drugs are showing promise in treating cardiovascular and cognitive conditions, and the Center for Medicare and Medicaid Services is exploring coverage expansion that could be transformative. Large pharma companies, facing patent cliffs, have amassed significant war chests for acquisitions, which could reignite biotech. And despite political headwinds, the pace of scientific progress remains robust, with new longevity drugs, gene editing platforms, and organoid-based trials pushing the frontier of medicine.

     We’re not suggesting that healthcare will rebound overnight. But we do believe the sector offers a compelling mix of value, innovation, and optionality, especially for long-term investors willing to look past the headlines.

 As we move into the final quarter of the year, our focus remains the same: to stay curious, stay flexible, and stay grounded in fundamentals. That’s why we favored global equities and commodities when few others did—and why we’re now recommending a closer look at healthcare.

Thank you, as always, for your trust. We look forward to navigating the rest of 2025 with you.

P.S. – On a separate healthcare note, but one especially relevant to us here at Creative:

Our esteemed colleague Bart Gadlage experienced a health scare this past quarter that truly shook us. Thankfully, Bart has fully recovered, and we’re incredibly grateful for that outcome.

In today’s world of instant communication, it may seem surprising that we didn’t share news sooner. The truth is, before we could send out an update, doctors had already delivered the encouraging prognosis. Bart suffered a left cerebellar hemorrhage caused by high blood pressure, something his normal annual physical did not detect.

In classic Bart fashion, his first words to Richard in the hospital weren’t about himself, but about others: he urged everyone to pick up a blood pressure monitor and keep tabs on their levels as your body is capable of compensating for a period of time until reaching a limit. That kind of selflessness—thinking of others while hooked up to machines—is exactly the spirit we value in those who care for our clients.
Of course, Bart isn’t alone in that mindset. Every member of the Creative team shares that same dedication to looking after others. Still, we’d all prefer to stay out of this part of the letter—and are doing everything we can to keep it that way!

 


 

General Compliance Disclosures

Statements made via this letter are the opinions of Creative Financial Group (“CFG”) and its advisors, and are not to be construed as guarantees, warranties or predictions of future events, portfolio allocations, portfolio results, investment returns, or other outcomes. None of the information contained is intended as a solicitation or offer to purchase or sell a specific security, mutual fund, bond, or any other investment. Readers should not assume that the considerations, suggestions, or recommendations will be profitable, suitable to their circumstances or that future investment and/or portfolio performance will be profitable or favorable. Past performance of indices, mutual funds, or actual portfolios does not guarantee future results. Future results may differ significantly from the past due to materially different economic and market conditions. SSI, its affiliates and its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein.

Investment products and services provided by Synovus are offered through Synovus Securities, Inc. (“SSI”), Synovus Trust Company, N.A. (“STC”) and Creative Financial Group, a division of SSI. Trust services for Synovus are provided by Synovus Trust Company, N.A. The registered broker-dealer offering brokerage products for Synovus is Synovus Securities, Inc., member FINRA/SIPC and an SEC Registered Investment Advisor. Investment products and services are not FDIC insured, are not deposits of or other obligations of Synovus Bank, are not guaranteed by Synovus Bank and involve investment risk, including possible loss of principal amount invested.

Synovus Securities, Inc. is a subsidiary of Synovus Financial Corp and an affiliate of Synovus Bank and Synovus Trust.  Synovus Trust Company, N.A. is a subsidiary of Synovus Bank.



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