PFA Updates

Mar 06, 2025

It’s been an eventful start to the year. While the markets have experienced some volatility and uncertainty, we remain optimistic. News headlines have certainly kept us on our toes, with discussions around tariffs, DOGE, inflation, and even the price of eggs. Despite the drama in Washington, the S&P 500 is up just over 1% [1] and the US Aggregate Bond Index is up over 2.7%.[2] The economy continues to show resilience – the Atlanta Fed’s GDPNow model forecasts 2.9% GDP growth in the first quarter of 2025.[3] President Trump has issued lots of executive orders which, along with the increase in tariffs, have made uncertainty the name of the game right now.

We are maintaining a positive view while keeping a vigilant eye on key indicators. One indicator of note is the S&P 500 EPS expectations have been weakening for three consecutive quarters.[4] Though there is always something to worry about, we believe clients should stay the course with their long-term investment strategies.

While stock prices have gone down in recent weeks, bond values have been going up. This movement is typical because in times of global uncertainty, investors flock to the safety of bonds, and although bonds have underperformed in recent years, this pattern highlights the value they bring to our model portfolios.

Our Investment Committee met a week ago to review the economy, markets, and investment model performance. We are pleased to report that our investment models continue to outpace their comparative indices, and we have no short-term strategy changes at this time. We do have some longer-term concerns about the economy and markets; therefore we have prepared portfolio changes to reduce risk if and when necessary. Below are a few quotes of interest from market commentators:

• "Bond yields are up more than 100 points since the Fed’s first rate cut in September. This reflects rising inflationary fears."[5]
• "Market resilience is my biggest takeaway of 2025 so far. The S&P 500 could challenge the 6,500 range this year." [6]
• "More companies have been cutting their forward guidance than raising it. This cautionary note may have more to do with the uncertainties surrounding President Trump’s tariff policies than actual concerns about their business profitability."[7]

Keep the faith, friends. Let us know if you have any questions about your investments or your retirement plan.

Sincerely,

Your PFA Investment Committee

[1] morningstar.com

[2] ishares.com

[3] chaikinanalytics.com

[4] earningsscout.com 

[5] marketwatch.com

[6] fundstrat.com

[7] chaikinanalytics.com