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April 8, 2025

Quarter in Review & Outlook

By Matthew Haraburda CFA® & CFP®

We started the year with the theme: resetting expectations. We expected more market volatility due to high stock valuations and uncertainty around trade policy.

What we didn’t expect was how fast and often the headlines would change—especially on trade. That created more market swings, not just in stocks but in bonds too.

Where The Market Is Focusing

At the start of the year, markets were excited about deregulation and tax reform. But that focus quickly shifted to trade policy. Tariffs have dominated the news, and now many economists are talking about the risk of stagflation—that’s when inflation rises while economic growth slows.

That’s understandable. When there’s a lot of uncertainty, consumers and business leaders often wait before making big decisions. They want a clearer picture before committing to long-term plans.

So, what are we watching as we move forward?

The longer this trade uncertainty continues, the more likely it could slow down the economy. That’s not our main expectation right now, but it’s something we’re watching. We believe the President and his team understand that people need stability to make smart business choices. Some decisions have already been delayed because of all this uncertainty.

We may also see some unusual economic data in the coming months. For example, some companies may have rushed to move inventory or close deals in Q4, which could make Q2 look slower than it really is.

Our Investment Outlook

Now, how does this impact our investment strategy?

In stocks, we still prefer value overgrowth and large companies over small or mid-sized ones. Bigger companies usually have stronger balance sheets and can handle uncertainty better. Even though they might be priced higher, we think they’re in a better position during times like these.

In bonds, we’re leaning toward shorter-term bonds instead of longer ones. If tariffs cause inflation to rise, we don’t think you miss much by staying short. Yields are still reasonable, and if long-term rates go up, we may adjust.

We’re still optimistic about the long term. Yes, the first quarter was rocky. But we think things will settle down later this year. When they do, the market may return its focus to positives like tax reform and deregulation.

If you have any questions, feel free to reach out to me or your advisor. We’d love to talk.

Thanks, and hope to speak with you soon.

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