June Weekend Ranting: Embracing the Unknown
As we approach the halfway point of the year, one thing is clear—nothing about 2025 has been easy. Equity markets have managed to recover their losses from earlier in the year, bonds have been bonding (as they do), and global tensions are steadily rising. From geopolitical flashpoints to economic growing pains, the backdrop is anything but calm. The arm waving and doom saying by the media feeds the flames and the masses are in need of stress relief meds.
Stepping back, we all instinctively know uncertainty is always part of the investing equation—that’s the very definition of risk-taking. But it does feel like we’re standing at a bit of a balance point. On one side of the scale, you’ve got a narrative that sounds like the opening scene of a financial thriller: military conflicts, ballooning interest payments on government debt, and a political environment that feels more like a game of whack-a-mole. If you follow that thread, it’s easy to conclude that the universal fabric —and by extension, the markets could be in for a rough ride.
On the flip side, there’s a more cyclical, perhaps even optimistic, interpretation. Maybe this is just the natural part of the economic cycle. A cooling-off period that leads to lower interest rates, refinancing of debt, and eventually, long-term asset inflation. That’s not a fairy tale—it’s a pattern we’ve seen before. Military conflict?.... yeah that’s an element that seems omnipresent. Since the 90’s, the Middle East has been pretty much always in a state of conflict and Russia-Ukraine has been “a problem”. Kinda seems “Orwellian” but that’s a rant for another day.
Looking ahead economically (because that’s what we do) the view is unchanged. Focusing too much on short-term stories and trends can lead to emotional decisions—and emotionally magnified decisions often lead to poor investment outcomes. An old adage that hasn’t changed. It’s human nature to want to act when things feel uncertain, and that’s where the real risk lies.
As we sit here today (Sunday June 22 @ 12:20pm) the S&P 500 is up a few percent on the year. That might not sound like much, but context matters. Back in early April, the market was down over 15%. That’s a massive swing in just a few months. And if you zoom in on other asset classes—tech, mid-caps, even some international sectors—the volatility has been even more pronounced. There may very well be downside volatility tomorrow with the dawn of a new week and escalation in Iran. Then again, equities might rise. Volatility gets driven by what (or what not) is said overnight. That’s to be expected. Regardless, the media WILL be in full throat and do their darndest to scare the pants off their viewers/readers/followers. Remember, that’s what they do.
So, where do we go from here? As always, we stay grounded. We stay diversified. We stay focused on the long-term plan, not the short-term noise. Because while the headlines will keep changing, the principles of sound investing don’t. Our portfolios are in a market neutral position leaving us ample ability to take advantage should markets decline meaningfully. Not a prediction, just where we sit. Staying balanced has served us well over time and we expect this time to be no different.
Stay well, stay sane, and enjoy the upcoming July 4th Holiday! If you need anything from us, or just want to chat, don’t hesitate to reach out.
Ed, Frank, & Tammy
Edward Stiles
200 N Union St.
Kennett Square, PA 19348
cell 610-745-1931
Securities and Advisory Services offered through Commonwealth Financial Network®, member FINRA/ SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network
All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results. All references to markets, equities, stocks, crypto, bonds, interest rates, Muni’s, and treasury securities, are notional and for informational and explanation purposes only.This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.