Market Performance: The Reality Beyond Headlines

As we settle into spring 2025, the financial headlines continue their predictable cycle of dramatizing market movements and speculating about economic doom. Yet behind these attention-grabbing narratives lies a more nuanced reality. 

In this quarter's update, we'd like to cut through the noise and share what's actually happening in markets, put recent performance in proper context, and remind us all why maintaining investment discipline through periods of uncertainty remains the cornerstone of long-term financial success. 

Market Performance: The Reality Beyond Headlines

Despite the alarming headlines you might be seeing, markets aren't crashing. Q1 2025 showed mixed but largely positive performance across diversified portfolios:

• U.S. Stocks: -4.80%

• Foreign Stocks: +4.70%

• Global Real Estate: +3.00%

• U.S. Intermediate-term Treasury Bonds: +3.14%

• U.S. Short-Term Inflation-Protected Treasury Bonds (TIPS): +3.04%

• U.S. Extended Duration Treasury Bonds (STRIPS): +5.06%

• Developed Markets Government Bonds: +2.89%

• Emerging Markets Government Bonds: +2.22%

It's worth noting that while U.S. stocks were down overall, value stocks—which we strategically overweight in our portfolios—have posted positive returns year-to-date.

Data: U.S. Stocks (MSCI USA IMI Index), Foreign Stocks (MSCI World ex USA IMI Index), Global Real Estate (MSCI ACWI Real Estate Index), U.S. Intermediate-term Treasury Bonds (Bloomberg U.S. Treasury 3-10 Year Index), U.S. Short-Term TIPS (Bloomberg 0-5 Year Treasury Inflation-Protected Securities Index), U.S. Extended Duration Treasury Bonds (Bloomberg U.S. Treasury STRIPS 20-30 Year Index), Developed Markets Government Bonds (FTSE World Government Bond Index), Emerging Markets Government Bonds (Bloomberg USD Emerging Markets Government Bond Index).

The Wisdom of Evidence-Based Investing

The Wall Street Journal recently featured Dimensional Fund Advisors (DFA) in, A Billionaire and an Oscar Winner Have Made a Hit Movie. It’s About Investing. The article highlights their evidence-based approach and exciting new documentary,  “Tune Out the Noise,” which aligns closely with the investment philosophy we implement for our clients.

The documentary, directed by Academy Award-winner Errol Morris, reveals how groundbreaking academic research from the University of Chicago in the 1960s fundamentally challenged Wall Street conventions.

These insights—presented through interviews with Nobel Prize-winning economists like Eugene Fama, Robert Merton, and Myron Scholes—show why rules-based, broadly diversified portfolios consistently outperform stock-picking and market-timing strategies. 

The film makes a compelling case that investment success comes not from chasing headlines or trying to outsmart markets but from maintaining discipline, controlling costs, and focusing on the dimensions of returns that academic research has proven matter most.

Market Timing: A Fool's Errand

Is a recession or bear market around the corner? Perhaps. But can it be reliably predicted in advance? History consistently shows the answer is no.

Markets experience a downturn on average every 4-5 years—this is simply a normal part of the business cycle. Importantly, these downturns typically last less than one year, while the subsequent recoveries tend to be much longer.

As our friends at Uplevel Wealth so eloquently put it: "The market is always uncertain, but uncertainty doesn’t mean chaos—it means opportunity for those who stay the course. The most successful investors aren’t fortune tellers; they’re realists."

There is no "neon sign" warning investors when to exit or re-enter markets. Attempting to time these moves requires being right twice—selling at the high and buying back at the low—and doing so consistently. A single timing mistake can cost hundreds of thousands or even millions in lost growth over a lifetime.

Policy Uncertainty and Market Volatility

Markets dislike uncertainty, which inevitably leads to volatility. As the Trump administration implements its economic agenda, we should expect continued market fluctuations as policies evolve and markets adapt.

An interesting but underreported fact: The Biden administration actually implemented significantly more tariffs ($144B in revenue) during its term than Trump did during his first term ($89B in revenue)—yet markets didn't collapse and this received little media attention.

While economists generally agree tariffs aren't optimal economic tools, the current administration appears to be using them as negotiating leverage.

We should expect some additional uncertainty and volatility as these trade issues develop, but this shouldn't derail a properly structured long-term investment strategy.

Staying the Course

Remember that, when you partner with North Ridge Wealth Advisors, your financial plan is designed with market fluctuations in mind. The most reliable path to investment success remains focusing on the big picture with an appropriate time horizon, maintaining broad diversification, and avoiding reactive decisions based on short-term events or predictions.

Have questions about your financial plan, or looking for a partner to support you during turbulent times? We’re here to help! Reach out, or send us an email. Having a financial planning team in your corner to guide you through trying times can help bring you financial peace of mind.