A Scary but Familiar Script

My mother is a huge fan of Hallmark Channel movies, and I’ve never understood why. Each movie is exactly the same. The cast, plot, and length of each film are different, but in the end the guy always gets the girl no matter what challenge the writers put in the way. I often remind her of this fact, yet she chooses to watch each film as if this movie will be different. Spoiler: it never is.

Unfortunately, the first quarter for the US stock market has looked more like a plot for a horror movie rather than a Hallmark movie. US Stocks (S&P 500) have fallen roughly 10% to start the year and have fallen 13% since their all-time high in February. Fears of slowing growth, potential declines in consumer spending, sticky inflation, and tariffs have all weighed heavily on the financial markets causing the decline.

Thankfully your team at Life Planning Partners has you in a diversified portfolio where other characters in this movie have contributed more positively to your investment mix.

Despite the turbulence in US Stocks, International stocks (Vanguard Total International Stock Index) have rallied over 5% to start the year. Bonds have also seen positive returns this year gaining 3% as interest rates have continued to fall.

The beauty in diversification is the supporting cast can shine even when the main character falls. Diversification remains key to being prepared for an uncertain future, and this recent market pullback is no different. Diversification in other asset classes has certainly saved the day in 2025, which is why it remains an important part of our investment approach.

Although it seems like we are in unprecedented territory with financial markets, what we have experienced is not unfamiliar at all. Financial markets have seen a 10% pullback around every 16 months. In fact, our last 10% pullback in US stocks was exactly 16 months ago in October of 2022.

Volatility is not a new plotline. It has been part of the financial markets story since its inception. If we look at the past 45 years of financial markets, we have seen an average intra year decline of 14%. Yet, 34 out of the past 45 years had positive returns despite these pullbacks.

Is this time different? Sure. It is different. The cast, plot, and length of the market pullback is unknown. However, just like those hallmark movies we already know the ending. Those who stay patient, block out the noise, and take a long-term view are rewarded. Those who panic and sell when volatility persist are left in the dust. We have seen this movie playout in 2018, 2020, 2022 and many other years before that.

We know the world remains a crazy place. Hang in there- we will see the end of this and enjoy the happily ever after ending. There’s always a light at the end of the tunnel, and it often comes when we least expect it. As they say, “The sun always shines above the storm.”

In response to the recent market volatility, Warren Buffett took some time to remind us of Rudyard Kipling’s classic poem:

“If you can keep your head when all about you (others) are losing theirs ... If you can wait and not be tired by waiting ... If you can think — and not make thoughts your aim ... If you can trust yourself when all men doubt you ... Yours is the Earth and everything that’s in it.”

We are here for you if there is anything on your mind you would like to discuss.