Recent volatility and movements in financial markets have made major media headlines. With talks of different and new tariffs raising concerns about a potentially costly trade war, equity markets and the major indexes (including the S&P 500 and Dow Jones Industrial Average) have pulled back from recent all-time highs hit in February.
Equity markets dislike uncertainty, and for now, there are worries these tariffs are contributing to economic confusion. As financial professionals, we guide clients with a long-term vision. We build portfolios with the understanding that volatility is a part of the investment experience. We know it can be uncomfortable, but it is a natural, normal, and necessary part of investing. We use diversification and disciplined strategies designed to navigate the inevitable pullbacks and corrections in equity markets. One of our primary goals is to avoid emotional reactions when making investment decisions. If you’re looking for strategies to stay calm during market fluctuations, check out our recent podcast on navigating volatility: Watch here. Please remember that it is impossible to predict when a particular event will lead to a market top or bottom. Therefore, we use long-term planning for our investment decisions.
To offer some perspective, the S&P 500 has been down for five of the last six weeks. While historically this is a normal, and an often-necessary occurrence, investors have grown accustomed to the smooth ride the market has provided over the last 24 months. As we highlighted in our recent 1st Quarter Market Update, the S&P 500 has gone over 600 trading days without a 10% correction—an unusual stretch considering such corrections typically occur about once a year, with an average intra-year decline of 14.1% since 1980. As a result, we have been warning of an increase in market volatility, and now we have it.
For some clients, the daily fluctuations of equity markets can create stress, distracting them from their long-term financial plan and investment goals. If you find yourself in this situation, it might be beneficial to limit your exposure to emotionally charged news. When we identify a reason to adjust your portfolio, we will take action accordingly.
If you are concerned about the market’s recent activity, please feel free to call us. We are here for you. Thank you for choosing Curo as your guide. We appreciate the trust and confidence you have in our firm!