After we finished the first quarter of 2025, on April 7th, stock market volatility was growing as was uncertainty in the stock market. With that in mind, I sent an email to everyone before this 1st Quarter newsletter was complete as 1st Quarter information (see below) was not as dramatic as that first week of April in my opinion.
In that email, I wanted to assure you that I don’t limit my review and perspective on the markets and economy to the quarter, looking at things in “bite size pieces”. In the event of major changes or moves, I like to give my perspective when warranted.
The email I sent reminded us of patience and the value of diversification. I gave my views on what was happening in the stock market and my recommendation (if you did not receive that email, please let me know and I’ll forward a copy to you).
Two days after that email was sent, on April 9th, “the S&P500 surged 8.11%..., the Dow Jones Industrial Average jumped 6.94%...and the tech-heavy Nasdaq Composite led the rally with an impressive 10.16% gain...”1. While significant, each index was still negative year to date but illustrated the extreme volatility in the stock market.
To me, this extreme volatility is a testament to the value of a diversified portfolio, one that includes non-equity investments, such as bonds and cash. Even adding a small amount to your portfolio could help reduce volatility and perceived loss during periods of time like this.
📌 Q1 2025 Market Recap: A Promising Start with a Cautious Finish
📉 Market Performance
The quarter began with strong momentum—so much so that the S&P 500 hit an all-time high in mid-February. However, markets gave back those early gains, and by the end of March, the S&P had declined by about 4%, its first negative quarter since 2022. While not alarming, the pullback reflected a shift in sentiment as investors weighed a mix of encouraging fundamentals and fresh uncertainties.
🔠Looking Ahead
As we move into the 2nd Quarter of 2025, investors will be keeping a close eye on inflation data, Fed commentary, and further developments in international trade policy. The big picture remains constructive, but headlines may continue to stir short-term volatility. Staying focused on long-term goals and maintaining a well-diversified portfolio remains as important as ever.