Take a moment to think about the markets and the world around us. If you are feeling uneasy or exhausted from the pace of change... you’re not alone. We are hearing this from our clients and it’s understandable.
We're facing potential impacts from tariffs, government cuts, rapid AI development, and possible risks to job security, inflation, Social Security, as well as Medicare/Medicaid. People have a range of reactions to the second Trump Administration. Perspectives on the changes are viewed as opportunities for growth or as potential risks to United States’ financial stability and standing in the world. Frankly, many are feeling a little of both.
This Time is Different
We go down a rabbit hole and start to think — what if this time is really different for the market? Ahh, of course it is. But that’s just because each economic or market worry will always be different. In the past 25 years, we have witnessed unforeseen economic, market, political, and geopolitical chaos in the global financial crisis, COVID-19, and housing and dotcom bubbles to name a few. Each one was different. The recovery from each of these and eventual achievement of new stock market highs should prove the economy is not only incredibly resilient but can’t be consistently predicted, nor can the market be consistently timed.
Yet, forecasts about the market’s direction are everywhere, and the more we listen, the more we worry. John Kenneth Galbraith once said, “There are two kinds of forecasters; those who don’t know and those who don’t know they don’t know.” While the many inaccurate forecasts fade and are forgotten, mistakes made from acting on them can last a lifetime.
Market Correction
We've recently seen our first market correction since 2023, defined as a 10% pullback from a recent high but perspective is key. Since the 1980s, the S&P 500 has had a greater-than-5% drawdown almost every year, except 1995 and 2017.1 What we're seeing now is a correction, not a complete loss of long-term gains. The S&P 500 is back to where it was six months ago, in September 2024, showing that short-term declines don't always mean long-term losses. Ultimately, while market downturns are not unique, the sound investing principles you’ve talked to your advisor about remain the same.
What’s Next
Maybe you still have questions about where we are headed? Perhaps you think you know what is next? I know this — I’m not a policy expert, nor an economist, doomsdayer, or an optimist, but I found comfort in what French writer/philosopher Voltaire said 250 years ago: “Doubt is not a pleasant condition, but certainty is absurd.”
Rather than reacting to short-term volatility by making hasty decisions, I encourage you to stay committed to the financial plan you and your advisor have developed. Attempting to time the market or move assets to cash can undermine your progress. Instead, let’s focus on:
- Your Long-Term Goals – What originally drove your financial decisions and their timing? Your investment policy was created with these objectives in mind, and they remain the cornerstone of your financial success.
- Open Communication – Reach out to us. Let’s revisit the "why" behind your plan to reaffirm its relevance and strength, even in uncertain times.
- Opportunities in the Market – Market corrections can present unique opportunities to buy high-quality assets at lower prices, ultimately benefiting your portfolio.
Finally, if you regularly read our content, you may recognize that our regular market commentaries tend to end with the same three statements.
- We remain biased towards high-quality companies.
- We believe clients are best served reminding themselves of the timeless principles of patience and diversification.
- The key to successful investing is commitment to a long-term investment plan.
We return to these statements month after month, regardless of economic, political, or world events, because they reflect what we believe to be fundamental truths and our north star in investment and planning. I reiterate them now, because they continue to be relevant in the current moment. Let’s be patient, let’s stick to our long-term plan, and let’s talk as often as needed to help us all through these moments of turmoil while we seek stability and reassurance in the days ahead. While uncertainty can be unsettling, rest assured that we are here to navigate these moments with you.
If you have any concerns, please reach out. We are here to support you every step of the way.
1. Source: Bloomberg, based on the S&P 500 Index
The opinions and analyses expressed in this presentation are based on Curi RMB Capital, LLC’s (“Curi RMB Capital”) research and professional experience are expressed as of the date of this presentation. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future performance, nor is it intended to speak to any future time periods. Curi RMB Capital makes no warranty or representation, express or implied, nor does Curi RMB Capital accept any liability, with respect to the information and data set forth herein, and Curi RMB Capital specifically disclaims any duty to update any of the information and data contained in this presentation. The information and data in this presentation does not constitute legal, tax, accounting, investment or other professional advice.
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