Market Holds in Uncertainty, The L-Shaped Recovery Debate, & RIA vs. Broker

This week on Money Wise, the team recaps another choppy stretch for the markets as the Dow dropped 1,070 points (2.7%), the S&P 500 fell 81 points (1.5%), and the NASDAQ lost 438 points (2.6%). Year-to-date, losses continue to deepen with the Dow down 8%, the S&P 500 down 10.2%, and the NASDAQ down 15.7%. The Money Wise guys agree that we remain in the thick of what they’re calling a “tariff tantrum,” with ongoing headline-driven volatility and no clear end in sight. Trading volume has fallen below average on both the buy and sell sides, signaling that many investors are taking a wait-and-see approach as negotiations with global trading partners get underway.

The team discuss the likelihood of an "L-shaped recovery" rather than a fast V-shaped rebound, emphasizing that uncertainty around tariff negotiations is keeping markets stuck in a sideways trading range. While there’s cautious optimism that some policies may shift or soften—especially as pressure builds heading into the 90-day trade negotiation deadline—they note that confidence among institutional investors remains low. Still, there are selective opportunities emerging in beaten-down sectors like tech, and the Money Wise guys have been making targeted moves. Their takeaway: In a market this headline-sensitive, discipline, diversification, and emotional restraint remain essential.

The L-Shaped Recovery Debate

The Money Wise team explores the idea of an "L-shaped recovery," contrasting it with the swift, V-shaped rebound seen during the COVID-era downturn. In this scenario, the market experiences a sharp drop followed by a prolonged period of stagnation, rather than a quick climb back. With investor confidence shaken and uncertainty lingering around ongoing tariff negotiations, the guys agree this slower, flatter trajectory may be more realistic. They point to low trading volume and lack of decisive direction as signs that many investors are in a holding pattern—waiting for clarity before reentering the market in a meaningful way.

In the second hour, the Money Wise guys explore RIA vs. Broker. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.