Volatility rant….. Ed’s first ruminations of 2025
Made it all the way to March without the pressing need to rant. Markets were going up, alternative assets (read crypto) were “off to the moon”, and interest rates “were surely trending lower”. All was good at “investing land”. Until they weren’t….
As we write today (March 6th), the NASDAQ is almost at the 10 percent correction mark from its high, crypto doing crypto things (down about 20 percent), and pretty much all risk assets starting to take a hit to the downside. The general market (as S&P500 index) has swung to the downside for the year and things are taking a negative tone. Alas, as we have opined before, volatility is unpleasant in the moment but necessary over the long haul. This time is no different. The rules of investing/economics/life have not been repealed. Quite the contrary, they always re-emerge when most inconvenient.
We started the year prognosticating 2025 to be one of higher volatility and a market neutral weighting. Not a time to be taking excess risk or to be outside on one’s normal risk tolerance. We are holding with that. Equity (stocks) have had a nice run since the last meaningful pullback in 2023 and a lot of the riskier stuff has gone up a lot. A 20 to 25 percent decline wouldn’t be out of the ordinary (not predicting, just putting it in its place). If you are an investor (and not a gambler/speculator), you need to be ready and able to deal with such realities.
The Macroeconomic situation is confusing and has a little bit for everyone. Trade/tariff wars (economic), real war in the Russia-Ukraine conflict and potential ending of “some sort”, possible sea change in military and foreign spending, potential “re-shoring” of many business entities in response to the aforementioned trade wars, a treasury yield curve signaling recession, potential tax cuts (or not)…. If your head is spinning from all the noise, its normal.
As we sit today, there are a lot of potential huge possible positive outcomes. There are also a lot of not so good potential outcomes. We could pick any one of the confusing points and state a positive and negative potential outcome. Going to depend on execution and hence the reason for the volatility. We are optimistic but one needs to always factor in risk of negative outcome, and this time is no different.
To end on the broken record part and the narrative that never gets old. Investing is a personal journey, and one mans “gut wrenching decline” is another mans “regular ho hum event”. Your investment posture should mirror your beliefs and comfort level over the near and long term. Volatility is normal, investments go up and down, and today’s crises is tomorrows nothingburger so act accordingly.
As always, feel free to reach out with any questions, concerns, or if you just want to chat. We are here for you and always ready to make time to support you. Stay well!
Ed, Frank, & Tammy
Edward Stiles 200 N Union St. Kennett Square, PA 19348 cell 610-745-1931
stilesed@retire-me.com
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.
| 
