PFA Updates

Navigating Market Volatility Together

Apr 04, 2025

Hello Friends,

We understand that recent market volatility and alarming headlines can be unsettling. Here are a few key observations:

•   It's natural to feel concerned when investment accounts drop in value. We hear your concerns.
•   News headlines are alarming, but realize, the more sensational the more it sells, regardless of accuracy.
•   Every crisis is unique, but the long-term outcome remains consistent. Markets eventually ﬁnd a bottom and rise to new highs.

Our diversiﬁed investment strategy is designed to weather such storms. The US stock market has dropped in the last six weeks; if you expand the time period, the S&P 500 is down about 8% since 12/31/2024.[1] Despite this, the market includes resilient companies like Microsoft, Coca-Cola, Walmart, JP Morgan Chase, and McDonald's. These companies are unlikely to go out of business, and Americans will continue to support them. So, the notion that the markets are going to go to zero and we lose all our money does not seem likely.

For historical perspective, the S&P 500 closed at 5,396 on 4/3/2025.[2] During previous crises, it reached lows of 3,583 on 10/14/2022 (Russia-Ukraine war, Fed interest rate hikes, high inﬂation) and 2,237 on 3/23/2020 (COVID crisis).[3] Even with the current pullback, we are well above the lows of these previous crises. Great companies (stocks) weathered the storms.

Our typical client has a moderate investment allocation: 50% in US stocks, 15% in international stocks, and 35% in bonds and money market. While US stocks are down, our bonds and international stocks are holding their value. Our moderate clients are about down about 2.5% since 12/31/2024, which is part of our plan. Stocks down 8%, our moderate clients down about 2.5%.

We’re here to support you. Sometimes, it helps to hear another perspective. Our advice is to turn off the news and enjoy time with loved ones. Patience, faith, and time will see us through.

If you’d like to discuss your personal investment strategy or retirement plan, please feel free to reach out.

Best regards,

Your PFA Investment Committee

[1]   morningstar.com
[2]   morningstar.com
[3]   morningstar.com