"July, that's when I found out you lied" - Drake. Numbers don't lie, though.

1. Flight to Safety: Cash is still King
One of the clearest trends this year has been the surge of capital into cash and other highly liquid assets. With the Fed's holding rates at their highest levels in more than 15 years, investors are finally earning meaningful yields on their safe holdings. Money-market funds, a staple for New York's financial firms, have swelled greatly. U.S. money-market assets hit an incredible $6.5 trillion at the end of Q1 2024 and continued rising into 2025.

New York–based advisers say clients are earning around 5% yields with minimal risk, a stark contrast to the near-zero returns of the previous decade. From corporate treasuries to individual 401(k) accounts, many New Yorkers are embracing a "cash is king" moment, even as advisers remind them that the opportunity may close quickly once the Fed cuts rates.

Bond markets are also seeing renewed appeal. After a punishing 2022, aggressive rate hikes hammered prices, but bonds now look attractive again to investors. New York traders report strong demand for investment-grade corporates and municipal bonds, including NYC's own, which are offering some of their best yields in years.

There's a theme: elevated rates have made safety profitable (for now).

2. Private Markets & Alternatives Boom
While public markets stabilize, private investing is experiencing a powerful expansion, especially among the city's institutional investors and offices. With companies now staying private longer, investors are pouring more capital into private equity, venture capital, private credit and real estate funds.

One of this summer's dominant Wall Street narratives is "private for longer," with investors searching for ways to access companies delaying IPOs. The secondary market for private equity stakes has exploded: global volume hit a record $103 billion in the first half of 2025, up 51% from the prior high.

Major New York players – Blackstone, KKR, Apollo and top investment banks – have expanded their secondary trading desks to meet this demand. With IPO and M&A activity muted between 2022 and 2024, investors hungry for liquidity are flooding the market, and high-profile institutions are eager to buy discounted positions.

Private credit is also surging. As banks retrench due to regulation and cautious economic outlooks, New York’s alternative asset managers have stepped in as direct lenders. Private-credit funds are offering yields of 8–12%, secured by assets, drawing interest from yield-seeking investors. BlackRock projects global private markets to grow from roughly $13 trillion today to more than $20 trillion by 2030, with private debt expanding rapidly.

For many family offices in the city, alternatives now make up 40%+ of portfolios, a drastic shift from the traditional 60/40 stock-bond model.

Alternatives are now central to how New Yorkers invest.

3. Cautious Optimism in Equities
On the stock market front, 2025 has brought a renewed (if cautious) optimism. The S&P 500 has posted modest gains so far this year, extending the recovery from the 2022 downturn. Wall Street strategists expect high-single-digit returns for the year, buoyed by an easing inflation picture and a growing consensus that the U.S. will avoid a recession.

Still, investors are rotating exposures. Expensive growth stocks are seeing outflows as fund managers favor value and cyclical sectors — industrials, energy and financials — that stand to benefit from an economic upswing and stable interest margins. Tech stocks, which surged during the early-2023 AI boom, are being evaluated with more scrutiny. New York analysts are differentiating between AI winners with real earnings and those perceived as speculative “concept plays.”

International equities are also regaining attention. With a slightly weaker dollar and stronger recoveries abroad, many New York advisers report clients increasing allocations to Europe and Asia after years of U.S.-centric portfolios.

Though volatility is lower than during the pandemic, memories of 2022 linger. Options activity remains brisk as investors hedge risks or generate income through protective puts and covered calls. The mood in equities: hopeful, but prepared.

4. ESG and Sustainable Investing: Evolving Priorities
New York remains a global center of ESG investing, even as the sector undergoes significant recalibration. After huge inflows in 2020–21 and a backlash fueled by greenwashing concerns in 2023–24, ESG strategies are settling into a more mature, disciplined phase.

Roughly $6.5 trillion — about 12% of all U.S. professionally managed assets — is now in ESG-oriented investments. Much of this capital flows through New York: BlackRock’s ESG ETFs, impact-focused funds from major banks and sustainability mandates from large NYC pension systems.

But investors are demanding more rigor. Engagement — using shareholder power to influence corporate behavior — is gaining favor over simple exclusion lists. Younger investors and institutional clients still want sustainability-aligned portfolios, but they expect measurable results, not marketing.

Climate-tech investing is emerging as a bright spot. New York's venture firms are channeling capital into decarbonization technologies, renewable energy and carbon-capture solutions, backed by city and state initiatives such as green-bank financing and climate-tech incubators.

In short, ESG is shifting from a buzzword to a set of practical standards that New York investors see as critical to long-term risk management.

5. Real Estate and Alternative Assets
Real estate — long a cornerstone for New York investors — remains a favored inflation hedge in 2025. Demand is strong for Brooklyn townhouses, Manhattan condos and upstate vacation properties. Foreign buyers have returned as well, drawn by relative value and confidence in the city’s resilience.

(For deeper analysis, see May 2025 Real Estate Trends issue.)

The wealthiest New Yorkers are also allocating more to alternative stores of value: art, fine wine, old Ferraris, and Richard Mille watches. Auction houses have posted robust sales in 2025, revealing a preference for hard assets during uncertain economic periods.

Crypto has cautiously re-entered the conversation. While enthusiasm is nowhere near 2021 levels, regulated New York trust companies and funds are seeing renewed flows from investors who prefer structured, compliant exposure after the 2022 crash.

Bottom Line
By July 2025, New York's investment landscape reflects a city balancing risk and reward in a transformed but semi-consistent financial era. Safety is lucrative and borrowing is costly. Investors are piling into cash and bonds even as they chase returns in private markets, selective equities and alternative assets.

New Yorkers have always adapted quickly to changing financial conditions — and this year is no exception. With cautious optimism and a wary eye on the Fed, the city's financial community is recalibrating portfolios to navigate the opportunities and uncertainties of 2025.

Sources: OFR Treasury – Money Market Funds Hit Record (May 2024) • BetaKit – Global Secondary Market Hits Record in 1H 2025 • Britannica Money – ESG Investing Trends