April 2025: Navigating Market Volatility with Confidence

The recent announcement by President Trump regarding worldwide tariffs has certainly sent shockwaves through global markets. While many view these measures as excessive and highly disruptive, it's crucial to approach the situation with a balanced perspective.

In just two days, the Dow Jones Industrial Average has dropped over 10%, and markets around the world have reacted with similar volatility. However, it's important not to overreact to the news headlines. History has shown us that market predictions can often be misleading. For instance, in 2023, despite widespread predictions of an imminent recession, we advised our clients to stay the course, and the recession never materialized. Instead, we experienced a strong rally in the last quarter of 2023.

Similarly, when Trump was elected, there was initial excitement on Wall Street, with many calling him the most "pro-stock market president in history." The market surged over 10% in a few short weeks, only to see those gains evaporate shortly thereafter. By staying cautious and avoiding the Trump rally in January, we managed to protect our portfolios from the subsequent 15% drop.

So, the big question isn't just "what should we do now?" but also, "what have we already done to protect your portfolio?"

Here's a quick overview of the steps we've taken together:

• Took profits before the election: We realized gains from the strong performance over the previous two years. Much of those gains would have been erased by this correction if we hadn't acted when we did.
• Avoided the Trump Rally in January: We stayed cautious. From the peak of that rally to today’s correction, the market has dropped around 15%.
• Rebalanced proactively: We rebalanced your portfolio three times since last summer, reducing equity exposure and increasing fixed income and increasing cash positions significantly. I noticed that Warren Buffett cash position was at an all-time high in the beginning of 2024. The final rebalancing took place the week before the 10% correction.
• Reduced overall risk exposure: These steps have helped soften the blow from this sudden downturn.
  
  

Looking Ahead: How We’ll Move Forward

The global trade and political landscape have fundamentally changed. But change also brings opportunity.

• We’ve already started adjusting your portfolio strategy, beginning when Trump was first elected. I’m actually quite excited about what lies ahead.
• We’re reducing our exposure to the U.S. and increasing allocations to international markets, especially Europe.
• I’m actively speaking with fund managers, analysts, and reviewing research to guide our next steps carefully.
• We’re exploring investments in key resource sectors—like copper, nickel, and other critical minerals—essential for the digital economy and the transition to net zero.
• Global bond markets are also on our radar, especially as central banks outside the U.S. begin to cut rates and diversify away from U.S. economic exposure.
  
  

Thank you for your continued trust and partnership. Together, we will navigate these changes with confidence and optimism.