As we head into 2025, it’s critical to stay ahead of the market shifts that will impact how financial advisors serve their clients. One of the biggest trends to watch is the continued dominance of the “Mag 7” stocks—seven mega-cap companies that have been driving growth across markets. For financial advisors, understanding the Mag 7 is more than just knowing which companies are performing well; it’s about leveraging that knowledge to guide clients in their charitable giving strategies.
The Mag 7: The companies leading the charge
The Mag 7 stocks include Amazon, Google, Microsoft, Apple, Tesla, Meta, and NVIDIA. These companies have outpaced the broader market in recent years, largely due to the rise of AI and other technological innovations. By the end of 2023, the market capitalization of these seven companies was roughly equivalent to the combined market value of Japan, Canada, and the UK’s entire stock markets. They’re impossible to ignore, and their growth has provided investors with significant capital gains.
Why it matters for financial advisors
If your clients hold stock in the Mag 7, you already know that these investments have likely seen substantial appreciation. With this comes the challenge of managing capital gains taxes. As an advisor, helping clients navigate how to best handle these gains is key. Ren’s donor-advised funds (DAFs) are a powerful tool in this regard. By donating appreciated assets like these stocks, clients can avoid capital gains taxes while making a meaningful charitable contribution.
At Ren, we provide financial advisors with flexible solutions that enable clients to donate these assets in a way that benefits them personally and maximizes the philanthropic impact. We’re not providing investment advice, but we are offering you a tool that can help your clients make the most of what they have—both financially and philanthropically.
The shift toward small cap stocks
Looking forward, market trends indicate a potential shift toward small-cap stocks. This presents an opportunity for advisors to help clients rebalance their portfolios, moving toward riskier, high-growth stocks. While this shift could mean more volatility, it also means more options for charitable giving. Small-cap stocks are typically valued between $300 million and $2 billion, and while they come with more risk, they also offer the potential for high returns. Advisors who stay on top of these shifts can help clients maximize their portfolios and their charitable goals.
For clients with these types of assets, Ren is positioned to accept a wide variety of assets, including smaller, riskier stocks. Working with Ren means you’re well-equipped to guide clients through a range of complex charitable giving options, including gifts of small-cap stock, which could otherwise be challenging for many charitable organizations to accept.
Why Ren?
For financial advisors, Ren provides more than just a platform for charitable giving—we offer a partner who understands your client’s financial needs and the complexities of charitable donations. As the market evolves and small-cap stocks gain more attention, we’re here to ensure you can offer your clients a comprehensive and flexible solution for managing their wealth and supporting their charitable goals.
With Ren, you can ensure your clients’ portfolios are well-managed and their charitable giving is maximized. Let us handle the logistics so that you can focus on what matters most: providing expert guidance to your clients, strengthening your relationship with them, and positioning yourself as a trusted advisor for their financial and philanthropic journeys.
