Market Commentary

“There are decades when nothing happens, and there are days when decades happen.” That timeless adage feels especially apt in 2025.

The saying goes, "Once is an accident, twice is a coincidence, three times is a pattern." This is the second time a big policy announcement immediately followed quarter-end. As writers of these pieces who must adjust on the fly, we hope to avoid a pattern. In this missive, we touch on a few headline topics flooding our inbox, highlight the slow-moving but relevant shifts happening in capital markets overseas, and lastly, provide quick cursory comments on new tax law. Reality > Headline In J

Writing a quarterly letter in the wake of a tariff announcement feels like an exercise in April foolishness. Markets are moving fast, and no doubt they’ll shift again before this reaches your inbox. A quick disclaimer—we’re not here for political hot takes; there's plenty of that elsewhere. Most questions now concern policy, tariffs, the U.S. dollar (‘USD’), and the market impact. We will touch on those and related topics below, but first a quick recap. U.S. equity markets surged post-election

This time last year we were asked to weigh in on how we thought typical stock/bond portfolios would perform; we answered, “mid to high single digits.” Most portfolios returned greater than that in 2024, led by equity performance. Our Capital Market Assumptions (CMAs) for equities as of the beginning of 2024 were generally mid-single digits for U.S. equities and mid/high single digits for international stocks. U.S. stocks significantly bested their CMAs while international equities were in line

In the spring of any presidential election year, questions roll in about party, policy, the growing political divide, and what that means for capital markets. What would various political scenarios mean for stocks? What happens if a particular tax policy proposal becomes law? Although situation and scenario-specific, in most cases, we do not urge action related to investments and asset allocation, but often will suggest action related to tax and financial planning. History shows us that there

Recap The consumer, economy, and markets all proved resilient in the recent quarter and year to date. In a new narrative, the larger corporations and wealthier households may benefit from the higher interest rates due to their liabilities largely being fixed when rates were lower and now earning substantially more on the cash they have on hand. Thus, higher rates actually benefit many and propel the economy, not universally stall it as traditional thinking goes. The long-anticipated recession

With so much emphasis placed on negative headlines, negative developments globally, and the ability to embrace one’s inner negativity, it oftentimes feels like it should pay to be negative. When it comes to investing, however, negativity rarely proves to be a winning formula. The past 24 months have been an excellent test case of condensing an investment lifetime into a tiny window of pessimism. Investors continuously faced reports about bear markets, ever-rising inflation, deficits, the Feder

Recap Last year was generally risk on in most asset classes, headlined by the S&P 500 up over 20%. Indices tracking Small and Mid-Cap U.S. companies were up in the mid-high teens, while international equities ended the year at similar mid-teens returns. Growth stocks bested value stocks in the U.S., though not overseas. The risk on sentiment spilled over to fixed income where riskier fixed income (high yield, floating rate loans) outperformed “core” fixed income (treasuries, U.S. Investmen

Recap The third quarter brought back volatility after a first half rebound, with stocks and many bonds giving up some, and in many cases, all year-to-date gains. Pain came towards the second half of the quarter, post-earnings season. This recalls a common refrain from a mentor and former colleague who would quip in various ways at the start of any quarter that the best time for stocks was when focus was on fundamentals and actual reported earnings. Market attention wanders toward other headlin

It would be avant-garde if we had ChatGPT write this quarterly letter. Alas, we did not. Humans still write this (for now!). Speaking of things that are not happening, we take comfort in writing a quarterly letter without need to use the word “unprecedented.” Each of the calendar years 2020, 2021, and 2022 were rife with events and markets which best were characterized as such. Fast forward to mid-2023 and the overriding sentiment is one of markets healing – equity valuations mean revert and i

The curse of living in interesting times has continued at the start of 2023 with the intersection of banking running headfirst into the clutches of the “artificially” intelligent future. Relative to last year, the first 45 days of this year felt normal by most comparisons, though we quickly came to learn there were new concerns lurking in the background. For those who may not have seen, within the span of only a few short days, two banks – Silicon Valley (SVB) in California and Signature Bank

Throughout this year, we have spent significant time discussing inflation and the Federal Reserve, so we felt it was important to pivot towards the story in financial markets for 2022, which begins and ends with fixed income. The headline grabbing 2.50-4.50% rise in interest rates corresponded with a decline of 7% to 15% in value for bonds, depending on particulars. We have come to expect the losses we saw in the equity markets (down 9% to 35%, again depending on the specifics), but losses in