Did the rally of about 20% off the early April bottom give us a second chance to reduce risk if we did not early in 2025?  In early April, about 2/3 of the S&P 500 were down 20% or more from their highs in bear market territory.  The entire market has entered a bear market about every 6 years for the last 150 years.

Two things come to mind when seeing these violent swings in the markets with policy, recession, economic uncertainty.   One, we now see how quicky markets can turn both up and down, so we should be more prepared for the rest of 2025. I think we will see a few more of these dramatic swings over the next 6 plus months. Secondly, it gives us a second change to rebalance portfolios at market levels that are basically even for 2025 vs down 10, 15 or 20%.  So, if you knew the market was going to fall a certain percentage this year or next what can you do now.

Getting back to my recurring theme over the last 12 months it would be for investors and the market itself rely less on the Magnificent 7 for returns.  In 2023 and 2024 the S&P 500 was about 25% in each of those years.  So, a normal cycle of consolidation is quite normal and can last a year or two so best to be prepared in case that does happen.  I am always suggesting trimming winners and concentrated holdings in retirement plans first for tax reasons, but this year may be the time we are ok trimming winners in taxable accounts.  For the Mag 7 earnings growth over the next 12 is expected to be about 8% vs about 9% for the other 493 companies according to Rich Bernstein of Bernstein Advisors LLC.

If your top 3 or 4 holdings account for 20% of more of your total portfolio that is quite top heavy as so many noticed in early April. Say your top holdings is up 600% since you bought several years ago.  Selling some and paying 20% or 23.8% capital gains may make sense.  Especially if you see that company drop 20-40% in a year and then you wish you would have.

I am constantly doing these things in the portfolios I manage for you but want you to know my thoughts on this market and that I am more cautious then bullish the rest of 2025.  

For the major asset classes I would categorize them as:

Stocks – Bullish- especially for long term investors- 5 years or more.  Build your lists of companies or industry groups you do not own then buy them on market pullbacks.  Trim your largest or concentrated holdings and hold that in cash to use for purchases later.

Bonds –Neutral- The Fed is and plans to lower rates.  The bond market has its own idea and yields have been moving up.   The I Shares Core US Bond Index ETF is up .29% this year and current yield about 3.8%.

Cash – I would say positive but not bullish.  Positive in that 3.5% to 4% range for money market funds today is not more than inflation so you are losing purchasing power on your cash, but it is something positive and gives you cash to buy stocks or bonds if the values improve.

The GLD or Gold index is up 23% year to date about the same as the 23.5% gain for the SPDR Euro Stox 50 index.  Most of your international and European investments should be having a good year so far.

We do utilize IBIT (iShares Bitcoin ETF) and ETHA (iShares Ethereum ETF) in some portfolios. I prefer to trade them vs long term holds of an asset class without a long-term track record.

I do want to thank everyone for their continued support of Campus Private Wealth.  I think our model buildout is several months ahead of schedule.   Our statements are transparent and have excellent detail (especially retirement plans).  Our trading and research partners I have selected so far have been excellent and we are finding good companies that many firms do not even cover that are doing extremely well.   The one last piece we are perfecting is performance reporting.  We have very high standards so are finalizing an excellent model with industry leader Black Diamond. Expect those reports to be available at your next meeting or Zoom.  On the financial planning side, we are fully operational and even rolling out a planning model for family or emerging investors who may not have enough assets to qualify for a wealth management relationship, but it important to start planning now.

Thanks to many of you we have received more referrals and introductions in our first 6 months than I did in my last 15 years at my previous firm.  Our success and growth allow us to expand the services and model that you design.

If you made it this far congratulations and thank you since I just get on a roll sometimes. 😊