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Once again, the process wins over predictions. Time aftertime, volatility takes its toll on investors. A well-definedprocess can greatly enhance returns while simultaneouslyproviding comfort. Make volatility your friend. Stock market leadership has changed. Consumerdiscretionary and technology stocks have lagged comparedto more traditional sectors like industrials and utilities. Tariffs are misunderstood. Politically motivated newsheadlines were spreading fear of rampant inflation due tonew tariffs. Read more to learn what really drives inflation. Irrational behavior leads to opportunities. After losing 20%from its highs, the stock market has rebounded to finish inpositive territory for the first six months of the year. Expect a weaker economy in second half of the year. Therewas a lot of noise in the economic numbers to start the year.Looking under the hood, however, employment growth wasmuch weaker than it appeared on the surface. We expect asofter economy that could allow the Fed to cut rates. Precious metals continue to deserve a spot in portfolios.Gold and silver are both up about 25% year-to-date. Wemade a timely shift from gold to silver in April, which addedabout another 10% on top of those strong year-to-datenumbers. We believe that silver has more room to run. Key TakeawaysSteve has over 30 years of experience managing money for financial institutions,non-profit organizations, retirement plans and individuals, and has earned theChartered Financial Analyst (CFA) designation. The market’s unique blend ofstatistical and psychological influences sparked Steve’s passion from an earlyage. He combines this experience and passion with a heavy dose of integrityand listening to provide impactful experiences for clients.In this issue, we’ll provide anoverview on these key areas:Process vs. Prediction ................ YTD Market Returns .................... Economy ...........................................Equities ............................................. Fixed Income .................................. Precious Metals ............................. Conclusion ....................................... MarketOutlookQuarter 3 - 2025About the AuthorSteven Hoffman is solely an investment advisor representative of Great Valley Advisor Group, and is not affiliated withLPL Financial. Any opinions or views expressed by Steven Hoffman are his own and are not those of LPL Financial.2335678 Message

As the correction took hold, our rebalancingmechanism was actively buying equities. We alsomade the proactive decision to increase targetequity allocations by 5% across the board asinvestor sentiment swung quickly from optimism topessimism. A repeated mantra of ours goes as follows: Howyou behave in down markets will determine yoursuccess…or lack thereof. Emotions and investingare not good friends, and news headlines areespecially adept at creating emotional responses. The chart below shows the VIX (Volatility Index),often referred to as the “fear index.” The spike inthe first half of the year was the second highest inthe past 10 years behind only the COVID-19response. Those who were swayed by fear and sold with thecrowd likely caused significant financial damage totheir portfolios as stocks quickly snapped back.Contrarily, those that used volatility to theiradvantage encountered great opportunities. It was apparent to me that many of our clientshave bought into the process. We were largelygreeted with calm and understanding during ourrecent portfolio review meetings. It was rewardingto witness their resolve, and to share the news ofthe strong relative performance of our portfoliosthis past quarter. The stock market experienced a V-shaped ride forthe first half of the year. The S&P 500 Indexentered bear market territory with a 20% correctionbefore rebounding to a full recovery. The largestholding in the S&P 500 Index, Nvidia (NVDA),shaved 40% from its price followed by an equallyimpressive rally. In our January Market Outlook, we stated that dueto lofty valuations “the market could hit an airpocket if sentiment changes quickly.” We alsohesitated to go along with the crowd of analyststhat were predicting 8-10% returns this year. Whilethose returns are still attainable, our point was thatone needs to consider the valuations at the startingpoint. We are almost back to where we started, sosome of the same concerns remain. This environment provided a perfect case study forthe effectiveness of investment strategies. NorthPoint portfolios went into the year underweightequities due to high valuations and excessiveinvestor optimism.The first half of 2025 provided aperfect case study for theeffectiveness of having (and stickingto) an investment strategy groundedin the fundamentals. 2How you behave in downmarkets will determine yoursuccess…or lack thereof.Process vs. Prediction

The other lesson that we have warned about is thedesire to be concentrated in the “hot” stocks. Byattempting to beat the market, investors do justthe opposite. Diversification involves holding out-of-favor assetclasses. In the first half of the year, unlovedinternational stocks were among the topperformers while the much ballyhooed large techstocks were near the bottom. Owning stocks thateveryone loves is comfortable, but comfort can beexpensive. A simple process of staying diversified andrebalancing after large market moves will faremuch better than one focused on security selectionand new events. I know that is very boring, butboring is good for long-term investors. As former Fed chairman Alan Greenspan stated in2013, "We really can't forecast all that well and yetwe pretend that we can, but we really can't.Markets do very weird things because it reacts tohow people behave and sometimes people are alittle screwy." This all reminds me of Warren Buffet’s $1 millionbet in 2008. Buffet bet a hedge fund manager thatthe S&P 500 Index would outperform a basket ofhedge funds over the course of 10 years. Despitethe index losing 37% in year one, the result waslopsided. The index produced annualized returns of7.7% compared to 2.2% for the hedge funds. This return is eerily similar a 20-year studyperformed by Dalbar in 2016 in which the averagemutual fund investor gained only 2.1% despite U.S.stocks generating returns of 8.2%. Humans areprone to making the same emotional mistakes overand over. A disciplined investment process can not onlyassist in avoiding emotional mistakes, but also helpin taking advantage of opportunities as theyappear. In a volatile year that has left the major stockindexes slightly positive, precious metals havebeen the big winner. International stocks caughtmany investors sleeping and have benefitted froma declining dollar. Small cap stocks continue to lagthe pack, but we remain optimistic. Bonds aredoing what bonds do and are on pace for mid-single digit gains for the year. Because of this distribution, conservativeportfolios are generating returns similar to muchmore aggressive portfolios. We believe this willcontinue to be the case in the years ahead.There has been much fear and speculationregarding tariffs. Despite that, we continue tobelieve that many long-term positive benefits canoccur from the negotiations. Historically, the U.S.has had much lower tariffs than our top 10 tradingpartners. A more equal playing field could improve thecompetitiveness of U.S. corporations, increase jobopportunities and produce a higher standard ofliving. We really can't forecast all that well andyet we pretend that we can, but wereally can't. Markets do very weird thingsbecause it reacts to how people behaveand sometimes people are a little screwy. - Alan Greenspan3YTD Market ReturnsEconomy

Second, there are other factors currently reducinginflation such as lower food and energy prices anddecreased pharmaceutical costs. As it stands now,inflation, as measured by the Consumer Price Index(CPI), is now at a four-year low. The Personal Consumption Expenditures (PCE)Index, the Fed’s preferred measure, is up only 2.3%over the past year and is close to the Fed’s long-term target of 2%. On the growth side, the Atlanta Fed’s model is nowpredicting an annualized GDP increase of 3.8% forthe second quarter. Some of this robustness is dueto the timing of international trade and reverses apoor first quarter reading. We expect the second half of the year to beweaker. Employment remains steady (4.2%unemployment rate in May) and real disposableincome rose 0.7% in May. This overall strengthcould keep the Fed from dropping rates anytimesoon. Digging deeper, however, the economy does notappear nearly as strong. For example, excluding thegovernment, education, & hospitality sectors, only26,000 new jobs were created in March, April andMay combined (according to Brian Wesbury,economist at FirstTrust Advisors). Much remains to be seen on the tariff front, whileinflation and recession risks certainly remain.Investors, however, should be cautious aboutreacting to economic news that often has apolitical agenda. This overall strength could keepthe Fed from dropping ratesanytime soon. Digging deeper,however, the economy does notappear nearly as strong.4Our trade deficit has already experienced thelargest one-month drop in history in April. It will belargely up to our trading partners if they want thismore equal playing field to be with a high or lowlevel of tariffs. The most logical result will be lowertariffs worldwide, which will benefit consumers. One of the big fears that opponents of the tariffspropagated was that inflation would risedramatically. We believe that view is short-sightedand misinformed for two reasons. First, we have already experienced a major jumphigher in prices in recent years caused by amassive increase in the money supply between2020-2022. Growth in money supply is the leadingdriver of inflation, not tariffs. People will adjusttheir spending choices based on prices, but nottheir overall spending level. In other words, the same amount of dollars chasingthe same amount of goods does not createinflation. Money supply growth drives inflation, andit has leveled off since its peak in 2022. This is why the 2022 storyline that inflation wouldbe transitory and short-lived was a falsehood. Thatmoney is still in the economy and consumers arestill dealing with a seemingly permanent higherlevel of prices. The current lower level of inflation simply meansthat prices are growing more slowly from this newhigher plateau.

The ensuing rally has brought us back to asituation similar to the start of the year. Meanwhile,earnings growth estimates for 2025 have pulledback from 12% to 5%. A now higher 10-year bondyield will discount these future earnings at agreater clip. This all suggests once again that lower long-termequity returns - think mid-single digits - should beexpected over the next decade or so. Bond yieldsof nearly 5% set a high hurdle rate given thatscenario. While performance for the S&P 500 is relativelyflat for the year, a look under the hood shows thatleadership has changed. Consumer discretionaryand technology stocks, which were among theleaders in 2024, have at least temporarily given upthe lead to more traditional sectors such asindustrials and utilities. Broader market leadership is a good thing in ourview. We’ve pounded the table in the past aboutnot only the concentration in the stock market, butalso the high valuations in the largest stocks.These concerns remain. The market’s self-correcting mechanism, however,appears to be working as evidenced by therotation in leadership. They say that the stockmarket is a voting machine in the short-term, but aweighing machine in the long-term. In other words, emotions may rule the day butfundamentals will eventually have the final say. Ithink we are starting to see more weighing goingon. Finally, the level of national debt is a concern thatnever seems to go away but has been exacerbatedin recent years. A perfect storm has occurredbetween the huge increase in debt followingCOVID-19 and the more recent rise in interestrates.Debt payments as a percentage of GDP are nearall-time highs, and this will only get worse in thenear-term as $7 trillion of debt will renew at higherinterest rates in 2025 in what has been coined the“the maturity wall.” These debt payments at a minimum will be a dragon economic growth, but much more seriousramifications could extend to national security andliving standards. The S&P 500 carries a forward P/E ratio (price-to-earnings) of 22.0x. This is 20% higher than the 10-year average of 18.4x. An overvalued stock marketcan theoretically correct itself in two ways – it cantrade sideways until earnings catch up, or it candecline in price. We seem to be getting a taste ofboth this year. Going into the year, we thought the market wasoverpriced by about 20%. The market quickly gaveus a 20% correction, bringing us to fair value andpresenting a good buying opportunity. 5Equities

First, the yield curve has morphed from an invertedposition (short-term rates higher than long-termrates) late last year into a more normal, upwardsloping curve. Inverted curves generally precederecessions, and it remains to be seen if we willescape such an environment. Upward slopingcurves, on the contrary, suggest improvingeconomic conditions. We don’t make large bets on interest ratemovements in our portfolios, preferring instead tostick to a duration of 4-6 years. This has been asweet spot in the yield curve recently. Very short-term bonds have been repricing at lower yields,while long-term bonds, such as a 10-year holding,have been experiencing price declines as currentmarket yields have moved higher. So, right in themiddle seems like a comfortable and profitableplace. The second part of our steering system is creditspreads. Credit spreads indicate how much moreyield above a treasury bond that investors requireto hold corporate bonds. The spread widens asinvestors perceive more economic or default risk.During March and April, the spread on high-yieldcorporate bonds widened by about 2% 6The broadening of returns is likely tied to thechanging expectations of future earnings. The chartbelow highlights the dominant earnings productionof the “Magnificent 7” stocks versus the other 493stocks in the S&P 500 in 2023 and 2024. Looking forward to 2025 and 2026 full yearestimates, the earnings gap is expected to closesignificantly as more traditional sectors improve.In our year-end outlook, we highlighted two classesthat traded well below historic relative valuations –international and small cap stocks. Internationalstocks have been a positive surprise while smallcap stocks continue to languish. Internationalindices have much higher weightings in the non-technology sectors, so they are benefitting fromthe broadening market as well as a weakeningdollar. We believe overweight positions to bothinternational and small cap stocks remain prudent.When undervalued asset classes move into thespotlight, prices can rise quickly. Fixed IncomeThe bond markets have been nearly as active asthe stock markets to start the year. To highlightthe changes, we will look at our two primarysteering tools in this space. We don’t make large bets oninterest rate movements in ourportfolios...right in the middle seemslike a comfortable and profitableplace.

This widening spread has the same impact on bondprices as rising interest rates – they both drivebond prices lower. The chart above shows the performance of the 5-year Treasury Bond Index versus the US High YieldBond Index. High yield bond prices (purple)declined by about 4% from the March peak, whilethe Treasury Index (orange) rallied. This highlights the importance of knowing exactlywhat types of bonds are in your portfolio. We continue overweight Treasury bonds in ourportfolios for protection when the stock marketfalters. Gold has been on fire this year, propelled by thegrowth in global money supply. Global traderelations, geopolitical tensions, and uncertaintysurrounding US monetary policy could also beimpacting precious metals prices. We shifted our gold exposure to silver in late April,which proved to be a timely move. At the time,gold had outperformed the S&P 500 by roughly35% year-to-date. The stock market’s “gold rush”continues, however it has becomeextended from a technical perspective.In late April, we shifted our exposure to silver – which is proving to be atimely move.While gold still has plenty of momentum, it hasbecome extended from a technical perspective.Silver has more potential in our opinion and oftenoutperforms gold late in cycles. Silver hasoutperformed gold by more than 10% since ourpurchase. From a very long-term perspective, the gold-to-silver ratio is also quite extended (see chartbelow), meaning gold is more expensive than silvercompared to historical norms. Over the past 100 years, the ratio has onlyapproached these levels on three other occasions:World War II, the early '90s recession, and the2020 pandemic.Additionally, silver does have more industrial uses,thus providing another source of demand otherthan a just store of value. 7Precious Metals

WI | Altoona903 S Hillcrest Pkwy715.598.7011MN | Mahtomedi748 Wildwood Road651.447.2235At Nor t h P o int Advi s o r G roup,we’re d e d i cated to p r o v idingcompr e h e n s ive finan c i a lguida n c e , tailored t o y ouruniqu e g o a ls, and p r e s e nted ina way t h a t ’s approa c h a b le. We’re b y y our side e v e r y stepof th e w a y with pro a c t i ve stepsand i n s i g h ts, ensur i n g eachtouch p o i n t moves yo u f o rwardand e m p o w e rs you to m a k e themost o f t h e success y o u ’veworke d s o hard to b u i l d .Want t o c h at with y o u r advisorabout t h e informati o n y ou justread? G e t in touch a n y t ime!8/ N o r t h P o i n t A d v i s o r G r o u p/ c o m p a n y / n o r t h p o i n t a d v i s o r g r o u pw w w . n o r t h p o i n t a d v i s o r g r o u p . c o mSecurities offered through LPL Financial, Member FINRA/SIPC.Investment advice offered through Great Valley Advisor Group, aregistered investment advisor. Great Valley Advisor Group and NorthPoint Advisor Group are separate entities from LPL Financial. Theopinions voiced in this material are for general information only andare not intended to provide specific advice or recommendations forany individual. All performance referenced is historical and is noguarantee of future results. All indices are unmanaged and may not be invested into directly. ConclusionNews items and emotions will continue to sway themarkets, and recessions will come and go. Despitethis, stocks go up over long periods of time. Don’t let short-term emotions disrupt your long-term investment plan. Set an allocation you can livewith, buy the dips, pay less attention to the news,and enjoy life. Hiring a qualified financial advisor to guide youthrough life’s changes may help. Thank you to ourclients for their continued business and relationship. We love what we do! Precious metal investing involves greater fluctuation and potentialfor losses. There is no guarantee that a diversified portfolio willenhance overall returns or outperform a non-diversified portfolio.Diversification does not protect against market risk. Rebalancing aportfolio may cause investors to incur tax liabilities and/ortransaction costs and does not assure a profit or protect against aloss. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee thatstrategies promoted will be successful.