The first quarter 2025 has left many investors feeling uneasy due to growing economic uncertainty. The imposition of tariffs on major global trading partners has raised concerns about potential inflation and slowed economic growth, leading some economists to predict a higher likelihood of a recession.
Although a government shutdown was averted, significant cuts to various programs and government workforce change have intensified political instability. U.S. stock markets have faced a downturn, falling into correction territory before recovering slightly, while international markets have also seen declines but remain in positive territory for the year.
In such volatile times, predicting the future is incredibly difficult, and any investment changes based on speculation could expose portfolios to unforeseen risks. Making decisions driven by short-term fluctuations can often turn temporary market dips into permanent losses, which is why we advise maintaining a steady, long-term approach.
Long-term trends indicate that in any 10-year period, in a diversified portfolio, you may experience one or two years with strong investment returns 1, one or two down years, and the other six or so years may yield average returns. Historically, diversified portfolios have shown an average annual growth rate of 6% to 8%, potentially doubling in value over a 10-year period, even amidst ups and downs.
The main takeaway is that markets fluctuate over time, and a long-term, balanced investment approach is likely the best way to navigate short-term volatility and avoid impulsive decisions.
[1] The Rewards of Long-Term Investing,” Franklin Templeton, https://www.franklintempleton.com/forms-literature/download/RLTI-FL
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No one should assume that future performance of any specific investment, investment strategy, product, or non-investment-related content made reference to directly or indirectly in this newsletter will be profitable. You should not assume any discussion or information contained in this email serves as the receipt of, or as a substitute for, personalized investment advice. Symmetry does not provide tax or legal advice and nothing either stated or implied here should be inferred as providing such advice. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.
Diversification seeks to improve performance by spreading your investment dollars into various asset classes to add balance to your portfolio. Using this methodology, however, does not guarantee a profit or protection from loss in a declining market. Past performance does not guarantee future results.
