On the heels of a strong equity market in both 2023 and 2024, the first quarter of 2025 appeared to continue the march higher. The S&P 500 Index® rose by 4.6% through February 17th (the boom) but then fell 8.5% from that date to the quarter end (the gloom) due to President Trump’s aggressive tariff policies.
The month of April brought further declines as steeper tariffs were announced and the market reacted strongly in both directions. What looked like a global trade war now looks like a duel between the world’s two largest economies, yet uncertainty remains.
Meanwhile, the fixed income markets provided a safe haven during the quarter with the Bloomberg Aggregate Bond Index up 2.8% and even longer bonds, the US 30 Year Treasury, up 4.4%. However, in April, the US 30 Year Treasury yields spiked, an indication that investors are anticipating a rise in inflation, another concern.
No one quite knows when all the uncertainty passes, but we do know that patience is generally a winning strategy. Our forecast for 2025 remains positive while we expect the rollercoaster ride to continue. In our attached commentary we expand upon all of these themes and more.
In closing, we remember the famous quote from Warren Buffett:
“Be fearful when others are greedy and greedy when others are fearful.”
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