Wes Moss and Conner Miller provide historical context and perspective on the latest financial news, including:
• The markets staged a dramatic V-shaped recovery following tariff fears. Investors, take note: Volatility can reverse quickly. Once you’ve chosen a solid strategy, it’s often more productive to stay the course rather than letting fear drive decisions.
• The S&P 500 dropped nearly 20% in April but rebounded in just six weeks. Panic rarely helps—history shows that recoveries can be swift and sharp.
• Tariffs triggered the downturn, but remember: trade makes up a smaller portion of the U.S. economy than one might assume. Try not to overreact to short-term headlines that struggle to reflect long-term fundamentals.
• Despite massive sell-offs, 97% of Vanguard investors made no trades. Their commitment to a long-term plan possibly helped them avoid reactionary moves in turbulent markets.
• Institutional investors—not individuals—were the primary sellers. Over $27 billion exited U.S. equities in a week, but 72% of that came from institutions, not retail investors. Individual discipline can sometimes work as an effective edge.
• Wes’s "school of fish" analogy illustrates market chaos. A few hedge funds dart, and the entire market reacts. Rather than being the panicked fish, it can often be productive to swim steadily with long-term conviction.
• “30 for 30” rule confirmed again: Historically, 30% of gains occur in the first 30 days after a decline. This recovery was even faster—don’t miss out by being on the sidelines.
• Happy retirees often win with the help of certain principles, such as:
a. Have a clear plan with long-term goals.
b. Diversify across asset classes.
c. Maintain balance with “dry powder” (safe assets) to ride out volatility.
• Bonds are back. With the 10-year U.S. Treasury yielding 4.5%, fixed income might become a meaningful part of your portfolio. Rebalance thoughtfully.
• Tariffs are likely here to stay. Even with deals and pauses, a 10% baseline tariff remains in place. Prepare your portfolio for a world where moderate tariffs are the norm.
• Real-world example: How tariffs affect prices. A hypothetical 25% tariff on Mexican avocados could raise a Chipotle bowl price by 40 cents. The message: some impact, but not catastrophic. And don’t forget that guacamole is delicious.
• Inflation remains under control for now. The future is uncertain, but April CPI rose only 2.3% year-over-year, the lowest since early 2021. Gas, groceries, eggs, used cars, and airfare all declined. Stay grounded in the data.
• Recession odds have been lowered by Wall Street economists. That’s helping push interest rates up, but also reflects growing optimism. Adjust your expectations accordingly.
• Global bond markets exceed $100 trillion, more than twice the size of U.S. equities. Understand your fixed income options—it’s not just about stocks.
• Final takeaway: Individual investors often win by thinking long-term. If you’ve got 5, 10, or 30 years before needing your money, you've got time on your side. It can be productive to stick with your strategy and stay invested.