Navigating Market Uncertainty
Stock market volatility and uncertainty have spiked in the last few weeks with headlines dominated by tariff proposals, potential trade wars, and a rapid 10%+ pullback1 in the S&P 500 since February 19. It’s no surprise clients are asking, “What’s really happening, and should I be worried?” Here’s the takeaway: context and patience are key.
The core issue driving markets right now is uncertainty—something investment markets notoriously dislike. Factors like shifting tariff policies, slowing economic growth and AI’s impact are leaving businesses and investors in a “wait and see” mode. This hesitation has fueled a swift downturn, with recession fears creeping into the conversation. Yet, there’s a silver lining: diversification is working. Unlike 2022, where stocks and bonds fell in tandem, bonds are currently providing a buffer as yields on the 10-year Treasury trend lower.
Historically, market pullbacks of 5-10% happen about three times a year, with corrections (10%+) occurring roughly once annually2. Even in positive years, volatility is normal—2024’s relatively calm ride just made this drop feel more jarring. Zooming out, the S&P 500 is only down a couple percent year-to-date, and bonds are up, reinforcing the value of a long-term view. We know that trying to time the market is a losing game; missing just the 10 best trading days over 20 years can cut your returns in half versus staying fully invested.
Looking ahead, clarity on policy—tax cuts, deregulation, or reduced government spending—could set the stage for growth, though short-term pain may be the price for long-term gain, much like the early 1980s under Reagan. For now, the advice is simple: stick to your plan, stay diversified, and don’t let headlines dictate decisions. As your planners, we prepare for these moments, so if you’re feeling uneasy, reach out to us. We’re here to be to your sounding board, to hold your hand and to talk you off the ledge if that’s what is needed.
Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.
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