As the first quarter of 2025 wrapped up, global markets reminded us that headlines can be noisy, but long-term investors can still find their rhythm. Here’s how the markets responded—and what it could mean for you.
Market Highlights: A Tale of Two Markets
- U.S. Stocks: It was a tough quarter at home. U.S. markets posted a -4.72% return, with large growth stocks (think tech) hit hardest. Small caps fared even worse. Interestingly, value stocks showed relative strength, outperforming growth across the board.
- International Markets: Developed international markets saw gains of +6.20%, with value stocks again leading the way. Even emerging markets beat the U.S., returning +2.93% for the quarter.
- Fixed Income: Bonds were a surprising bright spot. As interest rates eased, the Bloomberg U.S. Aggregate Bond Index returned +2.78%, offering a little stability amidst the equity volatility.
- Real Estate & Commodities: REITs also posted modest gains, especially outside the U.S. Commodities boomed, led by natural gas (+30%) and copper (+24%), while soybean meal tanked -10%.
Headlines vs. Reality
Despite alarming headlines—tariffs, political uncertainty, and rate shifts—the data tells a more nuanced story. International markets, even those directly targeted by U.S. trade policy (like China, Mexico, and Canada), posted positive returns. History reminds us: markets often price in expected bad news long before it hits the front page.
Takeaway: Stay the Course
While it’s tempting to react to headlines, this quarter is a great example of why it pays to remain diversified and think long-term. Global exposure helped many portfolios weather Q1 better than a U.S.-only allocation.
What’s Next? Let’s Talk Strategy
Now’s a great time to revisit your financial plan, check your risk tolerance, and explore how a globally diversified portfolio can help you manage uncertainty.
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