Reposted from Email that was sent out to clients
Dear Clients and Friends,
As we begin this Thursday, the headlines are painting a picture of doom: “Dow Craters 1,300 Points...” and “U.S. Stocks Plunge Just Minutes into Trading as Tariffs Wreak Global Havoc.”
Let me provide a bit of calm amidst the chaos.
Market Declines Are a Part of Investing
Market corrections, while uncomfortable, are completely normal. The problem is not the downturns themselves—it is how we respond to them. As I write this, the S&P 500 is down -3.85% today and -11.37% from the all-time highs set on February 19th. However, over the last five years, the S&P 500 is still up 118%.
So, the stock market is doing just fine. Please remember to think in terms of years, not short-term periods. This is a marathon, not a sprint.
The Real Risk: Missing the Best Days
One of the greatest dangers to any investor is exiting the market at the first sign of trouble. Market recoveries often happen swiftly, and missing just a handful of the best days can significantly reduce long-term returns, as we discussed in our Q1 Newsletter. The only way to ensure participation in these rebounds is to remain invested, regardless of short-term concerns.
Looking Ahead
We will be discussing this topic further in our upcoming Q2 newsletter, but given today's market opening, we wanted to provide this immediate update to keep you informed. As always, if you have any questions or concerns, we are here to guide you through market volatility and keep you focused on your long-term financial success.
Resources
A recent piece from Seeking Alpha (here) highlights the historical recurrence of tariff-driven uncertainty, drawing comparisons between today’s economic policies and those of the late 19th century under President McKinley. While protectionist trade measures can create short-term volatility, history reminds us that markets have weathered such periods before and continued their long-term ascent.
Additionally, this morning’s episode of Bloomberg Surveillance (here) was very well done and help put today’s upcoming events into perspective.
Stay the course. Stay invested. And remember, this too shall pass.
