We hope everyone enjoyed the 4th of July holiday and found some time to celebrate! As we head into the second half of the year, we think it is safe to say we all hope it is a little less eventful. The sheer number of major headlines that inundated our newsfeed was astounding as illustrated in the following graph.
Throughout the volatility, we kept our heads down and focused on the data – employment numbers, inflation reports, corporate earnings and other economic indicators pointed towards brighter days ahead. Since May, the markets have supported this sentiment and made mostly positive progress. As the pendulum swings towards positivity, we must keep in mind the multitude of variables heading into the second half of the year, which will likely drive some volatility yet again; for example, the Feds may be in the hot seat as far as their decision on short-term rates and Congress will begin the appropriations process for fiscal year 2026. We will also have to wait and see how the markets and economy play out after continued tariff negotiations.As always, we are happy to chat with you. Please reach out to us if there is anything we can help you with!
"The S&P 500 Index ended a volatile first half of 2025 with a total return of 6.2%, including dividends, closing at a record high. Despite the continued strength of the U.S. stock market, some have questioned whether American exceptionalism has peaked, whether the U.S. dollar is no longer a safe haven, and even suggested that America’s economic might versus the rest of the world is on the wane."
"The share of retail participation in the market notched an all-time high on April 29, comprising of 36% of order flow. For comparison, prior to the pandemic, the retail share of the market rarely breached 10%. The S&P 500 has erased its year-to-date losses, overcoming a nearly 20% drawdown. With it, valuations have vaulted to 21x forward earnings, well above the 30-year average valuation of 17x."
"Individuals often ask for help prioritizing financial goals-and are surprised when we recommend they build an emergency fund first. Why? Because without access to those set-aside funds the are far more likely to increase credit card debt and, once they max out credit cards, borrow from their 401(k)."