2025- Second Quarter Review- The Importance of Staying Invested and Adhering to a Long Term Investment Strategy

The quarter ended on 6/30/2025 is the most recent example of how critical it is to maintain a long-term investment approach, not one that is influenced by current events that we sometimes refer to as the “disaster du jour.” In many instances, an issue or concern overhanging the markets is transitory-and once in the rearview mirror, quickly forgotten.

To be a successful long-term investor, an individual or an investment firm like ours must screen out any emerging threats and the very real emotional responses connected to them- when a “fear and flight” instinct can kick in, prompting the sale of high-quality stocks as a consequence.

We like to think that our strength as a firm is that our managers act in accordance with our long-term philosophy, which protects our client portfolios from short-term moves or market timing. Short-term moves, carried out in an attempt to time the market are a poor strategy for good long-term results.

The second quarter saw the S&P 500 fall to a level just above a bear market decline, followed by a sharp recovery to an all-time high close of 6,173- for a +5.6% year to date return. The NASDAQ mirrored, closing at 20,273, an all- time high, with a year to date gain of 5.3%.

During the quarter the markets were affected by the on again, off again tariffs and the quickly changing postures towards our global allies, making it impossible to extrapolate any consistent investible trends. The on-going war between Russia and the Ukraine and the military strikes by Israel, punctuated by the U.S. aerial attacks on Iran’s nuclear development sites further obscured what might occur in the future.

In contrast, against this background, the underlying domestic economy remained strong. The majority of companies reported earnings that exceeded analysts’ estimates, inflation remained in check, and unemployment remained low at 4.20 percent. Consumer spending continues to be robust, if not quite at Covid, free money levels. If in doubt, try securing a dinner reservation or even a parking spot in most places. The U.S. economy continues to be the strongest large economy in the world.

A brief look back at the past five years is further evidence of the virtues of staying invested. During that time period, there were many impactful events like Covid, the invasion of Ukraine, extreme weather disasters, the emergence of artificial intelligence, and the relentless exchange of rockets and drones in the Middle East.

During the five calendar years ending on 12/31/2024, the S&P 500 generated an average annual return of 15.5%, rewarding those that stayed the course and remained invested.

No doubt there will be many more disruptive events in the coming months and quarters, Our commitment to you is that we will continue to practice our disciplined long-term approach with respect to your managed portfolios.

Have a pleasant summer.

Sources: FactSet