A friendly reminder that our Client Appreciation Day brunch will be held on April 26, 2025, at the Lansdowne Resort. Our guest speaker this year will be Melissa Stockwell, a war hero and Paralympian. Her story of strength and courage is incredibly moving… don’t miss it.
The first quarter of 2025 ended with the S&P 500 declining 4.59% year-to-date. As the market grapples with uncertainty and mixed signals, the most widely discussed challenge remains the ongoing Tariff wars and/or negotiations. This evolving situation presents both opportunities and risks, demanding careful navigation.
The Federal Open Market Committee (FOMC) completed its March meeting earlier this month and maintained its target range for the federal funds rate at 4.25% to 4.5%. The Fed is taking a more patient approach toward easing monetary policy amid slowing economic growth and policy uncertainty. However, we continue to believe that the Fed remains on its easing path, though the pace has slowed.
While the economy may be cooling, the labor market remains healthy, and a manufacturing recovery is underway. Federal government layoffs will likely drive the jobless claims higher but with modest impact as the unemployment rate remains low at 4.1%. U.S. industrial production and manufacturing outpaced expectations and will likely provide extended support for the economy.
Recalling previous commentaries, a sound investment philosophy is rooted in discipline and quality investments, and this certainly paid off this first quarter of the year. Amidst the Q1 market correction, high-growth technology and consumer discretionary stocks demonstrated their characteristic volatility, experiencing the most significant declines across sectors. Given our core stock portfolio’s emphasis on earnings consistency and stable revenues, we maintain limited exposure to these sectors. As a result, our core holdings have performed well compared to both the S&P 500 and the tech-heavy Nasdaq.
We expect lower interest rates and pro-growth policies, such as deregulation and tax cuts, to help accelerate the economy in addition to the potential of a technology-driven productivity surge. This trifecta can create an enormous investment opportunity, but discipline and quality investments remain steadfast principles.
Despite the long list of uncertainties, an equally long list of potential positive developments lie ahead such as the possibility of reduced tariffs with concessions from all parties, interest rate reduction, peace between Russia and Ukraine, and a reduction in the U.S. government deficit, to name a few. These can all serve as catalysts for market optimism. While uncertainty remains, it also opens the door for favorable outcomes that markets can embrace.
Our philosophy remains unwavering—navigate periods of heightened volatility and uncertainty with patience, discipline and quality investments. By maintaining this disciplined, long-term approach, we believe our portfolios are well-positioned for whatever lies ahead in 2025 and beyond.
| Thomas A. Toth, Senior Chairman | Kenneth Bowen, II President & CEO |